Philips 2011 Annual Report Download - page 104

10 Supervisory Board report 10.2.7 - 10.2.10
104 Annual Report 2011
retirement age under the plan is 62.5. The plan does not
require employee contributions. For more details, see
note 32, Information on remuneration.
10.2.8 Additional arrangements
In addition to the main conditions of employment, a
number of additional arrangements apply to members of
the Board of Management. These additional
arrangements, such as expense and relocation allowances,
medical insurance, accident insurance and company car
arrangements, are in line with those for Philips executives
in the Netherlands. In the event of disablement, members
of the Board of Management are entitled to benefits in line
with those for other Philips executives in the Netherlands.
Unless the law provides otherwise, the members of the
Board of Management and of the Supervisory Board shall
be reimbursed by the Company for various costs and
expenses, like reasonable costs of defending claims, as
formalized in the articles of association. Under certain
circumstances, described in the articles of association,
such as an act or failure to act by a member of the Board of
Management or a member of the Supervisory Board that
can be characterized as intentional (“opzettelijk”),
intentionally reckless (“bewust roekeloos”) or seriously
culpable (“ernstig verwijtbaar”), there will be no
entitlement to this reimbursement. The Company has
also taken out liability insurance (D&O - Directors &
Officers) for the persons concerned.
10.2.9 Remuneration Supervisory Board
The table below gives an overview of the remuneration
structure, which has remained unchanged since 2008.
Remuneration 20111)
in euros per year
Chairman Member
Supervisory Board 110,000 65,000
Audit Committee 15,000 10,000
Remuneration Committee 12,500 8,000
Corporate Governance and
Nomination & Selection
Committee 12,500 6,000
Fee for intercontinental traveling
per trip 3,000 3,000
Entitlement Philips product
arrangement 2,000 2,000
1) For more details, see note 32, Information on remuneration
10.2.10 2012
Annual Incentive
To support the strategic direction of the Company the
financial targets for the Annual Incentive 2012 have been
set in line with our (mid-term) performance goals.
Following the overall direction within Philips, line-of-
sight for the sector CEO’s will be introduced, whereby
half of their financial targets will be related to their sector
and the remaining half to the Philips Group. The team
targets will remain 20% of the total annual incentive
opportunity.
Long-Term Incentive
A one-time special Long-Term Incentive grant was made
to a group of key employees below the level of Board of
Management (approx. 500 persons) in January 2012. The
purpose of this Accelerate! Grant is to focus the key-
leaders on achieving the 2013 objectives: 4-6%
comparable sales growth CAGR, 10-12% Reported EBITA
and 12-14% return on invested capital (ROIC).
The Accelerate! Grant has the following features:
• An equal balance of shares and options (1 to 1);
• The vesting of the granted shares and options is based
on achieving specific midterm (2013) financial
objectives. Thus the vesting of this special grant is
dependent on future performance;
• The vesting period for both the shares and the options
is two years with an additional two year holding period
applying to the shares.
The Supervisory Board is supportive of this program and
contemplates introducing similar awards for the Board of
Management. This will be further discussed by the
Supervisory Board and in due time submitted to the
General Meeting of Shareholders for approval.