Information on remuneration

Remuneration of the Executive Committee

In 2013, the total remuneration costs relating to the members of the Executive Committee (including the members of the Board of Management) amounted to EUR 24,773,537 (2012: EUR 18,585,112) consisting of the elements in the table below.

Remuneration costs of the Executive Committee
in euros
 
2012
2013
 
 
 
Salary
5,640,090
6,011,557
Annual incentive1)
4,839,949
4,422,732
Performance shares2)
1,049,205
6,478,554
Stock options2)
1,194,444
2,020,040
Restricted share rights2)
1,566,448
1,115,504
Pension costs
2,054,516
2,277,705
Other compensation3)
2,240,460
2,447,445
1)
The annual incentives are related to the performance in the year reported which are paid out in the subsequent year
2)
Costs of performance shares, stock options and restricted share rights are based on accounting standards (IFRS) and do not reflect the value of stock options at the end of the lock up period and the value of performance shares and restricted share rights at the vesting/release date. Costs for the Accelerate! Grant are included
3)
The stated amount concern (share of) allowances to members of the Executive Committee that can be considered as remuneration. In a situation where such a share of an allowance can be considered as (indirect) remuneration (for example, private use of the company car), then the share is both valued and accounted for here. The method employed by the fiscal authorities in the Netherlands is the starting point for the value stated. The crisis tax levy of 16% as imposed by the Dutch government amounts to EUR 1,245,944 (2012: EUR 702,940). This crisis tax is payable by the employer and is charged over income of employees exceeding a EUR 150,000 threshold in 2012 and 2013. These amounts are included in the amounts stated under Other compensation

At December 31, 2013, the members of the Executive Committee (including the members of the Board of Management) held 1,479,498 (2012: 1,376,913) stock options at a weighted average exercise price of EUR 18.69 (2012: EUR 18.23).

Remuneration of the Board of Management

In 2013, the total remuneration costs relating to the members of the Board of Management amounted to EUR 10,928,951 (2012: EUR 7,301,334; 2011: EUR 10,844,833).

At December 31, 2013, the members of the Board of Management held 586,500 stock options (2012: 454,500; 2011: 1,072,431) at a weighted average exercise price of EUR 19.60. (2012: EUR 18.78; 2011: EUR 23.01).

Remuneration costs of individual members of the Board of Management
in euros
 
salary
annual
incentive 1)
performance shares 2)
stock
options 2)
restricted
share rights 2)
pension
costs
other compen-sation3)
 
 
 
 
 
 
 
 
20134)
 
 
 
 
 
 
 
F.A. van Houten
1,100,000
1,081,520
1,594,675
461,215
190,441
468,407
75,906
R.H. Wirahadiraksa
656,250
497,745
1,040,393
307,699
128,856
263,451
35,732
P.A.J. Nota
618,750
561,713
1,025,153
352,608
146,626
253,605
68,206
 
2,375,000
2,140,978
3,660,221
1,121,522
465,923
985,463
179,844
 
 
 
 
 
 
 
 
20124)
 
 
 
 
 
 
 
F.A. van Houten
1,100,000
1,279,520
209,589
315,760
422,845
47,154
R.H. Wirahadiraksa
600,000
523,440
149,067
217,020
243,438
34,961
P.A.J. Nota
600,000
556,200
188,029
253,836
247,883
60,754
S.H. Rusckowski (Jan.-Apr.)
233,333
178,500
(200,400)
(209,638)
90,211
159,833
 
2,533,333
2,537,660
346,285
576,978
1,004,377
302,701
 
 
 
 
 
 
 
 
2011
 
 
 
 
 
 
 
F.A. van Houten (Apr. - Dec.)
825,000
363,000
125,957
253,926
297,179
39,709
R.H. Wirahadiraksa (Apr. - Dec.)
450,000
148,500
105,477
180,686
170,299
72,125
G.H.A. Dutiné
650,000
214,500
462,263
334,186
245,018
143,774
P.A.J. Nota (Apr. - Dec.)
450,000
148,500
131,159
255,159
168,532
67,067
S.H. Rusckowski
687,500
231,000
211,915
341,856
254,975
336,773
G.J. Kleisterlee (Jan. - March)
275,000
92,400
375,736
29,973
(48,117)5)
105,679
P-J. Sivignon (Jan. - March)
178,750
45,045
213,435
7,041
68,830
9,340
R.S. Provoost (Jan. - Sept.)
512,500
132,300
213,434
69,545
175,301
22,606
 
4,028,750
1,375,245
1,839,376
1,472,372
1,332,017
797,073
 
 
 
 
 
 
 
 
1)
The annual incentives are related to the performance in the year reported which are paid out in the subsequent year. For more details on the annual incentives, see Annual Incentive
2)
Costs of performance shares, stock options and restricted share rights (including the once-only Accelerate! Grant) are based on accounting standards (IFRS) and do not reflect the value of stock options at the end of the lock up period and the value of performance shares and restricted share rights at the vesting/release date
3)
The stated amounts concern (share of) allowances to members of the Board of Management that can be considered as remuneration. In a situation where such a share of an allowance can be considered as (indirect) remuneration (for example, private use of the company car), then the share is both valued and accounted for here. The method employed by the fiscal authorities in the Netherlands is the starting point for the value stated. In 2011 the other compensation for Mr Rusckowski includes an amount of USD 445,976 (= EUR 325,352) related to tax equalization in connection with pension obligations
4)
A crisis levy of 16% as imposed by the Dutch government amounts to EUR 681,596 in 2013 (2012: EUR 413,405) in total. This crisis tax levy is payable by the employer and is charged over income of employees exceeding a EUR 150,000 threshold in 2012 and 2013. These expenses do not form part of the remuneration costs mentioned
5)
As Mr Kleisterlee was born before January 1, 1950, he continued to be a member of the final pay plan with a pensionable age of 60. No further accrual took place

For further information on remuneration costs, see Remuneration costs.

The tables below give an overview of the holding of the members of the Board of Management under the performance share plans, restricted share rights plan and the stock option plans of the Company:

Number of performance shares (holdings)
 
January 1, 2013
awarded 2013
awarded
dividend
shares 2013
December 31, 2013
 
 
 
 
 
F.A. van Houten
62,559
2,112
64,671
 
55,0001)
55,000
R.H. Wirahadiraksa
31,991
1,080
33,071
 
38,5001)
38,500
P.A.J. Nota
29,621
1,000
30,621
 
38,5001)
38,500
 
 
 
 
 
 
256,171
4,192
260,363
1)
Once-only Accelerate! Grant
Number of restricted share rights (holdings)
 
January 1, 2013
awarded 2013
released 2013
December 31, 2013
potential premium shares
 
 
 
 
 
 
F.A. van Houten
35,0351)
15,034
20,001
9,024
R.H. Wirahadiraksa
24,0451)
10,443
13,602
6,935
P.A.J. Nota
26,0701)
12,468
13,602
7,482
 
 
 
 
 
 
 
85,150
37,945
47,205
23,441
1)
(Partly) awarded before date of appointment as a member of the Board of Management
Stock options (holdings)
 
 
 
 
 
January 1, 2013
granted
exercised
expired
December 31, 2013
grant price (in euros)
share (closing) price on exercise date
expiry date
 
 
 
 
 
 
 
 
 
F.A. van Houten
20,400 1)
20,400
22.88
10.18.2020
 
75,000
75,000
20.90
04.18.2021
 
75,000
75,000
14.82
04.23.2022
 
55,0002)
55,000
22.43
01.29.2023
 
 
 
 
 
 
 
 
 
R.H. Wirahadiraksa
10,800 1)
10,800
23.11
04.14.2018
 
12,000 1)
12,000
12.63
04.14.2019
 
16,500 1)
16,500
24.90
04.19.2020
 
51,000
51,000
20.90
04.18.2021
 
51,000
51,000
14.82
04.23.2022
 
38,5002)
38,500
22.43
01.29.2023
 
 
 
 
 
 
 
 
 
P.A.J. Nota
40,800 1)
40,800
22.88
10.18.2020
 
51,000
51,000
20.90
04.18.2021
 
51,000
51,000
14.82
04.23.2022
 
38,5002)
38,500
22.43
01.29.2023
 
 
 
 
 
 
 
 
 
 
454,500
132,000
586,500
 
 
 
1)
Awarded before date of appointment as a member of the Board of Management
2)
Performance Accelerate! Grant options as of January 29, 2013

See note (31) Share-based compensation for further information on performance shares, stock options and restricted share rights as well Long-Term Incentive Plan.

The accumulated annual pension entitlements and the pension costs of individual members of the Board of Management are as follows (in euros):

 
 
age at December 31, 2013
accumulated annual pension as of December 31, 20131)
pension costs#,2,3)
 
 
 
 
F.A. van Houten
53
60,203
468,407
R.H. Wirahadiraksa
53
33,208
263,451
P.A.J. Nota
49
24,785
253,605
 
 
 
 
 
 
 
985,463
1)
Under average pay plan, including - if applicable - transferred pension entitlements under pension scheme(s) of previous employer(s)
2)
Including costs related to employer contribution in defined-contribution pension plan
3)
Cost are related to the period of board membership

When pension rights are granted to members of the Board of Management, necessary payments (if insured) and all necessary provisions are made in accordance with the applicable accounting principles. In 2013, no (additional) pension benefits were granted to former members of the Board of Management.

Remuneration of the Supervisory Board

The remuneration of the members of the Supervisory Board amounted to EUR 747,000 (2012: EUR 799,500; 2011: EUR 803,250); former members received no remuneration.

At December 31, 2013, the members of the Supervisory Board held no stock options.

The individual members of the Supervisory Board received, by virtue of the positions they held, the following remuneration (in euros):

 
 
membership
committees
other compensation 1)
total
20132)
 
 
 
 
J. van der Veer
110,000
20,500
5,000
135,500
J.J. Schiro
65,000
18,500
8,000
91,500
C.J.A. van Lede
65,000
10,000
5,000
80,000
E. Kist
65,000
8,000
5,000
78,000
H. von Prondzynski
65,000
10,000
5,000
80,000
C. Poon
65,000
14,000
11,000
90,000
J.P. Tai
65,000
15,000
20,000
100,000
N. Dhawan
65,000
10,000
17,000
92,000
 
565,000
106,000
76,000
747,000
2012
 
 
 
 
J. van der Veer
110,000
20,500
5,000
135,500
J.M. Thompson (Jan. - Apr.)
32,500
4,667
11,000
48,167
C.J.A. van Lede
65,000
10,834
5,000
80,834
E. Kist
65,000
10,333
5,000
80,333
J.J. Schiro
65,000
17,000
17,000
99,000
H. von Prondzynski
65,000
10,000
5,000
80,000
C. Poon
65,000
12,666
14,000
91,666
J.P. Tai
65,000
13,333
17,000
95,333
N. Dhawan (Apr. - Dec.)
65,000
6,667
17,000
88,667
 
597,500
106,000
96,000
799,500
2011
 
 
 
 
J. van der Veer
98,750
19,375
2,000
120,125
J-M. Hessels (Jan. - March)
55,000
5,125
2,000
62,125
J.M. Thompson
65,000
14,000
20,000
99,000
C.J.A. van Lede
65,000
12,500
2,000
79,500
E. Kist
65,000
15,000
2,000
82,000
J.J. Schiro
65,000
14,000
17,000
96,000
H. von Prondzynski
65,000
10,000
2,000
77,000
C. Poon
65,000
10,000
20,000
95,000
J.P. Tai (Apr, - Dec.)
65,000
7,500
20,000
92,500
 
608,750
107,500
87,000
803,250
1)
The amounts mentioned under other compensation relate to the fee for intercontinental travel and the entitlement of EUR 2,000 under the Philips product arrangement
2)
As of 2013, part of the renumeration of members of the Supervisory Board living in the Netherlands is subject to VAT. The amounts mentioned in this table are excluding VAT.

Supervisory Board members’ and Board of Management members’ interests in Philips shares

Members of the Supervisory Board and of the Board of Management are not allowed to hold any interests in derivative Philips securities.

Number of shares1)
 
December 31, 2012
December 31, 2013
 
 
 
J. van der Veer
16,624
17,192
H. von Prondzynski
3,290
3,402
J.P. Tai
1,053
2,175
F.A. van Houten
21,048
37,258
R.H. Wirahadiraksa
16,060
27,879
P.A.J. Nota
11,757
24,937
1)
Reference date for board membership is December 31, 2013
(0)
(0)
This is an interactive electronic version of the Philips Annual Report 2013 and also contains certain information in summarized form. The contents of this version are qualified in their entirety by reference to the printed version of the full Philips Annual Report 2013. This printed version is available as a PDF file on this website. Information about: forward-looking statements, third-party market share data, fair value information, IFRS basis of presentation, use of non-GAAP information, statutory financial statements and management report, reclassifications and analysis of 2013 compared to 2012.