Philips 2008 Annual Report Download - page 116

In accordance with its charter, the Corporate Governance
and Nomination & Selection Committee consulted in
2008 with the President/CEO and other
members of
the Board of Management on the appointment or
reappointment of candidates to fill current and future
vacancies on the Board of Management and the Group
Management Committee, prepared decisions and
advised the Supervisory Board on the candidates
for appointment, and supervised the policy of the
Board of Management on the selection criteria and
appointment procedures for Philips’ senior management.
The committee devoted specific attention to the
composition and diversity of the Supervisory Board
and the search for a female member with knowledge
of the healthcare industry.
Report of the Remuneration Committee
The Remuneration Committee, currently consisting
of four members, is responsible for preparing decisions
of the Supervisory Board on the remuneration of
individual members of the Board of Management and
the Group Management Committee. In performing
its duties and responsibilities the Remuneration
Committee is assisted by a remuneration expert
acting on the basis of a protocol ensuring that the
expert acts on the instructions of the Remuneration
Committee and on an independent basis in which
conflicts of interest are avoided. The Remuneration
Committee's tasks are laid down in the Charter of
the Remuneration Committee that forms part of
the Rules of Procedure of the Supervisory Board.
Currently, no member of the Remuneration Committee
is a member of the management board of another
listed company.
General remuneration policy
The objective of the remuneration policy for members
of the Board of Management is in line with that for
Philips executives throughout the Philips Group: to
focus on improving the performance of the company
and enhancing the value of the Philips Group, to
motivate and retain them, and to be able to attract
highly qualified executives, when required.
For the Board of Management, Philips benchmarks
with companies in the general industry in Europe
and aims at the median market position.
In order to link executive remuneration to the
company’s performance, the remuneration package
includes a significant variable part in the form of an
annual cash incentive and a long-term incentive in
the form of restricted share rights and stock options.
Scenario analyses are conducted annually and serve
as an input for the review of the remuneration policy.
Contracts of employment
Members of the Board of Management have a 4-year
contract of employment with the Company.
Contract terms for current members1)
end of term
G.J. Kleisterlee April 1, 2011
P-J. Sivignon June 15, 2009
G.H.A. Dutiné April 1, 2011
R.S. Provoost April 1, 2010
A. Ragnetti April 1, 2010
S.H. Rusckowski April 1, 2011
Reference date for board membership is December 31, 2008
1)
The main elements of the contracts are made public
no later than the date of the notice calling the General
Meeting of Shareholders where the appointment
of the member of the Board of Management will
be proposed.
The severance payment is set at a maximum of one
year’s salary, or in case this is ‘manifestly unreasonable’
for a member of the Board of Management in his first
appointment period, the amount shall not exceed
twice the annual salary.
Information on the individual remuneration of the
members of the Board of Management is shown in
the tables below as well as in the tables in note 34.
Philips Annual Report 2008116
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Our group performance
18
We care about...
8
Message from
the President
6
Performance highlights
14
Who we are