Philips parts ways with CEO in midst of massive recall

By Bart H. Meijer

AMSTERDAM (Reuters) – Dutch well being know-how firm Philips on Tuesday unexpectedly introduced the approaching departure of CEO Frans van Houten, within the midst of an enormous product recall that has halved its market worth over the previous yr.

Philips mentioned Van Houten would get replaced on Oct. 15 by Roy Jakobs, head of the corporate’s Linked Care companies, though his third time period as CEO was not resulting from finish till April.

“The supervisory board and present Philips CEO Frans van Houten have agreed that with the tip of his third time period in sight, the time is true for the change in management,” Philips mentioned in an announcement.

“I am proud of the end result”, Van Houten informed reporters. “It is all the time tough in fact to let go, however it’s a logical second at hand over after 12 years. It is nice to have the ability to hand over to an inside successor with the conviction he’ll construct on the muse that I’ve laid.”

A particular shareholder assembly might be held on Sept. 30 to nominate Jakobs, who joined the corporate in 2010, as CEO.

Philips shares have been up 2.2% in early Amsterdam buying and selling, however are nonetheless down greater than 50% because it shocked buyers in June 2021 by recalling 5.5 million ventilators used to deal with sleep apnoea.

Foam used for sound dampening can degrade and emit small particles that irritate airways, whereas gases launched by the degrading foam can also be poisonous or carry most cancers dangers, the corporate mentioned on the time.

Though this blow to Philips’ popularity may have led it to choose an outsider for the highest job, supervisory board chairman Feike Sijbesma mentioned Jakobs was the best man to repair the corporate’s issues.

“He has intensive worldwide expertise and he elevated the expansion profile of the companies he led”, Sijbesma mentioned.

“He led the ramp up of manufacturing following the recall and is aware of very a lot about affected person security and product high quality, so additionally from that perspective he’s the best particular person. He can hit the bottom operating.”

Throughout his virtually 12 years on the helm, 62-year outdated Van Houten led the transformation of the once-sprawling conglomerate right into a targeted healthcare specialist, spinning off its lighting and shopper electronics divisions.

Philips now focuses on medical imaging, monitoring and diagnostic gear and competes towards Basic Electrical and Siemens Healthineers.

(Reporting by Bart Meijer; Enhancing by Jason Neely and Mark Potter)