Roy Jakobs takes over from Frans van Houten as CEO of the Dutch tech company Philips. He has to work to restore confidence, solve the ‘snoring scandal’ and boost the ailing stock price.
‘Philips is in a major crisis that we need to get out of as quickly as possible’. That said the new Philips CEO, Roy Jakobs, at a special shareholders’ meeting on Friday. The Financieele Dagblad was present and prepared a report with some telling statements. Shareholders had gathered to ratify Jakobs’ appointment as new CEO.
Jakobs is the successor of Frans van Houten, who ran Philips for twelve years. Van Houten transformed Philips from an industrial conglomerate into a company focused on health technology. But his reign has ended in a minor way. A scandal involving sleep apnea devices and subsequent financial problems led to his resignation.
In the past year, the Dutch company ended up in a crisis due to problems with its Dreamstation, a device against sleep apnea. Because they may emit harmful substances, Philips had to recall more than 5 million devices. There are hundreds of lawsuits against the company in the United States. Philips has reserved 885 million euros to cover the costs of the scandal.
Since April last year, the Philips share has lost about 70 percent of its value. Van Houten received a lot of criticism: he would have recognized the scale of the scandal much too late. Earlier this year, more than 80 percent of the shareholders present voted against a planned bonus of 1.8 million euros for Van Houten.
We must recognize where we are if we are to solve the problems.
Jakobs officially takes over the torch on October 15. On Friday he promised more realism. “We have to recognize where we stand if we want to solve the problems,” he told FD. ‘Realism will have to resonate in our communication. There is room for improvement there.’
Gerben Everts of investor association VEB still had advice for Jakobs. ‘The policy at Philips was very defensive and negative. Our advice to Roy Jakobs is: communicate openly, completely and in a timely manner. Your predecessor left that.’
Van Houten himself briefly spoke during the meeting. ‘I led the company with courage. I think the repositioning has been successful. But it is also a reality that a lot still needs to be done.’
Van Houten immediately left the room at the end of the meeting. Philips chairman Sijbesma still had a farewell gift in store for the man, but the chairman was left with the bouquet of flowers.
The new CEO Jakobs comes from within the company and for the past two years has been responsible for the division that includes the sleep apnea business.