Dutch well being expertise 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 stated Van Houten would get replaced on October 15 by Roy Jakobs, head of the corporate’s Linked Care companies, regardless that his third time period as CEO was not as a consequence of finish till April.
“The supervisory board and present Philips CEO Frans van Houten have agreed that with the top of his third time period in sight, the time is correct for the change in management,” Philips stated in an announcement.
“I am proud of the result”, Van Houten advised reporters. “It is all the time troublesome after all to let go, however it’s a logical second handy over after 12 years. It is nice to have the ability to hand over to an inner successor with the conviction he’ll construct on the inspiration that I’ve laid.”
A particular shareholder assembly might be held on September 30 to nominate Jakobs, who joined the corporate in 2010, as CEO.
Philips shares have been up 2.2 p.c in early Amsterdam buying and selling, however are nonetheless down greater than 50 p.c 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 stated on the time.
Though this blow to Philips’ popularity might have led it to choose an outsider for the highest job, supervisory board chairman Feike Sijbesma stated Jakobs was the appropriate man to repair the corporate’s issues.
“He has intensive worldwide expertise and he elevated the expansion profile of the companies he led”, Sijbesma stated.
“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 appropriate individual. He can hit the bottom working.”
Throughout his nearly 12 years on the helm, 62-year outdated Van Houten led the transformation of the once-sprawling conglomerate right into a targeted healthcare specialist, spinning off its lighting and shopper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 tools and competes in opposition to Normal Electrical and Siemens Healthineers.
© Thomson Reuters 2022
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