Philips 2006 Annual Report Download - page 105

Philips Annual Report 2006 105
of the relevant markets. As the value of the current grant
levels has come down below market median, the grant
levels will be increased in order to bring the value more
in line with the market median. This also applies to
members of the Board of Management including the
President/CEO.
The share performance of Philips is measured on
the basis of the Philips Total Shareholder Return
(TSR) compared to the TSR of a peer group of leading
multinational electronics/electrical equipment companies
over a three-year period*. The TSR performance of
Philips and the companies in the peer group is divided
into quintiles. Based on this relative TSR position at
the end of December, the Supervisory Board establishes
a multiplier which varies from 0.8 – 1.2 and depends
on the quintile in which the Philips TSR results fall.
For 2006, the Supervisory Board has applied a multiplier
of 1.0, based on the Philips share performance over the
period from the last working day in December 2002
to December 31, 2005.
Based on this calculation method, the 2003 General
Meeting of Shareholders approved a pool of 12 million
stock options and 4 million restricted share rights (based
on a multiplier of 1.1 but excluding premium shares). Every
individual grant, the size of which depends on the positions
(often job grade) and performance of the individuals, will
be multiplied by the outcome of the multiplier.
In 2006 7,164,384 stock options and 2,466,189 restricted
share rights were granted under the LTIP (excluding the
premium shares to be delivered after a three-year holding
period); in 2005, 6,575,982 stock options and 2,252,808
restricted share rights were granted.
The 2006 General Meeting of Shareholders approved
the amendment of the maximum allocation from 2.5%
to 3.0% of the annual LTIP pool-size to members of the
Board of Management.
* Electrolux, Emerson Electric, Ericsson, General Electric, Gillette,
Hitachi, IBM, Intel, LG Electronics, Lucent, Marconi, Matsushita,
Motorola, NEC, Nokia, Philips, Samsung, Sanyo Electric, Sharp,
Siemens, Sony, Texas Instruments, Tyco International, Whirlpool.
Grants to members of the Board of Management
under the Long-Term Incentive Plan:
Long-Term Incentive Plan 2006
1,2)
stock options
restricted
share rights
G.J. Kleisterlee 48,006 16,002
P-J. Sivignon 33,003 11,001
G.H.A. Dutiné 30,006 10,002
T.W.H.P. van Deursen 30,006 10,002
R.S. Provoost 30,006 10,002
A. Ragnetti 27,000 9,000
1) Reference date for board membership is December 31, 2006
2) Long-Term Incentive Multiplier of 1.0 applied
Long-term Incentive Plan 2005
1,2)
stock options
restricted
share rights
G.J. Kleisterlee 48,006 16,002
P-J. Sivignon 32,004 10,668
G.H.A. Dutiné 32,004 10,668
1) Reference date for board membership is December 31, 2006
2) Long-Term Incentive Multiplier of 1.0 applied
Long-term Incentive Plan 2004
1,2)
stock options
restricted
share rights
G.J. Kleisterlee 48,006 16,002
G.H.A. Dutiné 32,004 10,668
1) Reference date for board membership is December 31, 2006
2) Long-Term Incentive Multiplier of 1.0 applied
For more details of the Long-Term Incentive Plan,
see note 33 of this Annual Report.
According to Philips’ Rules of Conduct with respect to
inside information, members of the Board of Management
(and the other members of the Group Management
Committee) are only allowed to trade in Philips securities
(including the exercise of stock options) during ‘windows’
of ten business days following the publication of annual
and quarterly results (provided the person involved has
no ‘inside information’ regarding Philips at that time)
unless an exemption is available.
54 The Philips sectors 86 Risk management 100 Report of the Supervisory Board 110 Financial Statements