Frans van Houten, where do we know him from?
You used to be in the soap Good times Bad Times Frits van Houten, a businessman who also bad guy of the series. His favorite character was Scrooge McDuck; someone who, without much moral sense, always wants to be paid down to the last penny. This week Frans – so not Frits – van Houten was in the news. The Philips CEO, who left last year, was scorned by investors and other parts of society. He was also accused of not having too much moral sense. Reason: he wanted to receive his reward for 2022 down to the last penny. This can amount to 1.7 million euros.
Why is that remarkable?
Philips had a downright dramatic year in 2022. The group – which now concentrates on medical technology and toothbrushes – suffered a loss of 1.7 billion euros in 2022 and announced a few weeks ago that ten thousand people will have to leave due to a reorganization. The company has a lot of costs because of a recall of sleep apnea devices. The foam used in the machines may crumble. Harmful gases can also be produced that can be toxic and carcinogenic.
Philips knew since 2016 that it should use a different foam, but it took years before the company took action. It had to announce several times that the costs for recalling the machines were still higher. The group is now facing all kinds of fines and civil cases. It could cost another millions to billions of euros. The stock price fell from more than 50 euros in April 2021 to almost 16 euros now. Last autumn, Van Houten left Philips as CEO after almost twelve years.
The current board, led by successor Roy Jakobs, waived the bonus for 2022. But not Van Houten. Investor clubs Eumedion and VEB “don’t get it”. They wonder why the Supervisory Board has not intervened with its authority to adjust Van Houten’s variable remuneration downwards. They also want to know why Van Houten is still available until April for consultancy work against a basic salary of more than four thousand this yearexcluding bonuses.
Wasn’t there already a fuss about Van Houten’s bonus?
That’s right. Bonuses always do well on the bingo card of dissatisfied shareholders. That was also the case last year. The apnea device crisis was already in full swing and yet the board, led by Van Houten, wanted to pay itself a bonus. Dissatisfied investors voted down that proposal with a large majority of 80 percent.
But Van Houten ignored the opposition and still paid himself a bonus of 1.8 million euros. Opposite radio station BNR he said at the time that he found the fuss “beaten up”. “I think people worry too much about it. I think the Netherlands is the only country in the world asking these questions about my salary.” According to Van Houten, there were “other things that are going well” and that is why he deserved the extra.
It is not known with what Van Houten defends the current bonus. He was silent this week. Only audible was the figurative bang of a door at the Philips head office, which Van Houten closed hard behind him.
In the absence of columnist Marike Stellinga, who is on writing leave, chooses NRC every Saturday a person of the week.
A version of this article also appeared in the newspaper of February 25, 2023