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The Amsterdam, Netherlands-based company also said that its management team will forego bonuses this year.
Omar Ford
February 21, 2023
2 Min Read
Image credit: Kameleon007 / iStock via Getty Images
Philips won’t be issuing bonuses for its top management team, according to its annual report. The news comes hot on the heels of the company facing a recall of the 21,345 that were originally recalled in June of 2021.
Philips noted the reason behind top management forgoing bonuses was because of its performance and the negative experience of shareholders and other stakeholders.
The recall involves several models of Philips’ Trilogy 100 and 200 ventilators along with a Garbin model, according to FDA.
The agency cited two reasons behind the recall:
The silicone sound abatement foam installed to replace PE-PUR foam may separate from the plastic backing due to adhesive failure. The silicone foam material may potentially move and block the airpath, which may reduce air flow in the ventilator and could also cause the device to alarm. If an alarm is not recognized or acted upon, the patient could experience trouble breathing, such as asphyxia, hypoventilation, or hypoxemia, which can be life-threatening.
Philips observed residual PE‐PUR sound abatement foam in some reworked ventilators that were returned to customers. Further exposure to PE-PUR foam may cause potential health risks, which can result in serious injury, cause permanent impairment, and require medical intervention to prevent permanent injury to users.
FDA said as of Jan. 4, 2023, there have been 82 MDRs (63 MDRs for foam delamination and 19 MDRs for particulate debris contamination) and no deaths.
The recall debacle, which began nearly two years ago, has taken its toll on the Amsterdam, Netherlands-based company.
Since it began, Philips has seen a 70% plunge in its market value and began 2023 by announcing it would cut 6,000 jobs. Just a few months before, Philips cut 4,000 jobs.
Philips is currently in confidential discussions with the U.S. Department of Justice regarding a possible agreement. French prosecutors opened up a preliminary investigation into the recall in September of 2022.
The company even saw a change in leadership. Long-time Philips CEO Frans van Houten announced he was stepping down from the position in August of 2022. Roy Jakobs, took the helm of the company in October.
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