Philips 2015 Annual Report Download - page 87

Supervisory Board report 10.2.9
Annual Report 2015 87
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 benets 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 action 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.
10.2.10 Remuneration of the Supervisory Board
As the base fee for the members of the Supervisory
Board had not changed since 2008, and in view of the
increased activities and responsibilities of the
Supervisory Board, a revised remuneration structure
was proposed and approved by the 2015 General
Shareholders’ Meeting. The table below gives an
overview of this new remuneration structure.
Philips Group
Remuneration Supervisory Board1) in EUR
2015
Chairman
Vice
Chairman Member
Supervisory Board 135,000 90,000 80,000
Audit Committee 22,500 n.a. 13,000
Remuneration
Committee 15,000 n.a. 10,000
Corporate
Governance and
Nomination &
Selection Committee 15,000 n.a. 7,500
Separation
Committee 15,000 n.a. 10,000
Attendance fee per
inter-European trip 2,500 2,500 2,500
Attendance fee per
intercontinental trip 5,000 5,000 5,000
Entitlement to
Philips product
arrangement 2,000 2,000 2,000
1) For more details, see note 29, Information on remuneration
10.2.11 Year 2016
2016 will be a momentous year for Philips with the
planned separation into two world-class companies
focused on HealthTech and Lighting opportunities. As a
result of this separation, during 2016 we will review the
remuneration and long-term incentive policies that
apply to both companies and submit whatever is
required by the nancial and regulatory authorities and
request shareholder approvals, as appropriate.
I
n respect of the HealthTech business we expect minimal
changes in target levels of remuneration that will apply
to the Board of Management in 2016.
10.3 Report of the Audit Committee
The Audit Committee is chaired by Jackson Tai, and its
other members are Neelam Dhawan, Orit Gadiesh and
David Pyott. Jeroen van der Veer also regularly
participated in Audit Committee meetings. The
Committee assists the Supervisory Board in fulfilling its
supervisory responsibilities for (inter alia) ensuring the
integrity of the Company’s financial statements and
reviewing the Company’s internal controls.
The Audit Committee met ve times during 2015,
including at the conclusion of each quarter, and
reported its findings to the plenary Supervisory Board.
The CEO, the CFO, the Chief Legal Ocer, the Head of
Internal Audit, the Group Controller and the external
auditor (KPMG Accountants N.V.) attended all regular
meetings.
As decided by the 2015 Annual General Meeting of
Shareholders, Ernst & Young Accountants LLP were
appointed as the company’s new external auditor
eective January 1, 2016. To ensure a smooth transition
between KPMG Accountants N.V. and Ernst & Young
Accountants LLP, the Audit Committee also invited the
lead partner from Ernst & Young Accountants LLP to
attend Audit Committee meetings during the second
half of 2015. KMPG Accountants N.V. and Ernst & Young
Accountants LLP each reported that the transition
between auditors was proceeding well and the Audit
Committee has condence that Ernst & Young
Accountants LLP will assume its auditor duties without
interruption.
Furthermore, for each meeting, the Committee met
separately with each of the CEO, the CFO, the Chief
Legal Ocer, the Head of Internal Audit and the
external auditor as well as on an ad hoc basis with other
company employees, such as the Group Treasurer, the
Group Accountant, the Head of Mergers, Acquisitions
and Divestments and the Head of Financial Risk and
Pensions Management.
The overview below indicates some of the matters that
were discussed during meetings throughout 2015:
• The Company’s 2015 annual and interim financial
statements, including non-financial information,
prior to publication thereof. The Committee also
assessed in its quarterly meetings the adequacy and
appropriateness of internal control policies and
internal audit programs and their findings.
•Matters relating to accounting policies, financial risks
and compliance with accounting standards.
Compliance with statutory and legal requirements
and regulations, particularly in the financial domain,
was also reviewed. Important findings, Philips’ major