Pension funds criticise Philips’ €1m executive bonus
NETHERLANDS - Several Dutch institutional investors, have criticised Philips president and chief executive Gerard Kleisterlee's €350,000 bonus for the sale of the company's semiconductors arm.
Robeco's Erik Breen, also speaking for ABP and PGGM, reportedly said during Philips' shareholder meeting yesterday: "We consider the acquisition and sale of company divisions as part of the normal duties of the board governors".
Three Philips executives, among them Kleisterlee, were handed a total reward bonus of €1m following the successful sale of the division that gave Philips a €4bn book profit.
In Breen's opinion the executives already benefit from the share packets that come with the sale of the semiconductors division and the extra bonus is inappropriate.
Philips supervisory board member Kees van Lede was quoted by the Dutch financial daily Het Financieël Dagblad as saying during the meeting that this was a "extraordinary payment in an extraordinary situation", though adding that bonus payments for successful mergers and acquisitions, and divestments are common practice elsewhere.
Breen announced that Robeco, ABP and PGGM, as members of Dutch corporate governance platform Eumedion, will propose in their autumn recommendations that institutional investors should look more closely at bonus payments.
Shareholders yesterday also voted that Kleisterlee could stay on as chief executive until at least 2011.