Ladies and gentlemen, I am pleased to open the annual general meeting of shareholders of Royal Philips N.V. The COVID-19 pandemic still restricts our options for meeting, which is why, once again, our meeting will be virtual. Understandably, we hope to be able to welcome you at a next general meeting. A limited number of persons is present here. Next to me, seen from your left to right, Feike Sijbesma, Supervisory Board Member and my successor as Chair of the Supervisory Board. Marnix van Ginneken, our Chief Legal Officer, Frans van Houten, our CEO, and Abhijit Bhattacharya, our CFO. Via an audio connection, we have two other participants, Christine Poon, Chair of the Remuneration Committee, and Liz Doherty, Chair of the Audit Committee. The other Supervisory Board Members had to be absent from this meeting.
This also holds true for two persons nominated for appointment to the supervisory board, the ladies Chua Sock Koong and Indra Nooyi. Of course, I will be saying more about their nomination later on. We also have present here Hanneke Overbeek on behalf of our external auditor, EY. Before I give the floor to Frans for his speech, I would like to make a few remarks about our practical procedures today. Some shareholders have responded to our appeal to submit questions in advance if desired. We will be answering some of those questions at this meeting. All questions and answers will be published on our website after this meeting. Some shareholders who submitted questions in advance have received the opportunity to ask follow-up questions during the meeting. To streamline the meeting procedure, I will designate three moments for this at the end of agenda items two, four, and eight.
During the meeting, voting on the proposals is possible online, in any case, by the shareholders who have registered to do so. The vote is open from this point onward and will remain open throughout the meeting. After addressing all agenda items, I will close the voting procedure. I will disclose the voting results, and I will determine which decisions have been taken. Voting online is new for us, and after the meeting, we will assess how this went to decide how we want to structure future meetings. At the very end of this meeting, we will briefly speak about transitions within the Supervisory Board. Now, I am pleased to give the floor to our CEO, Frans van Houten, to deliver his speech. Frans will deliver his speech in English, and the Dutch translation is available online simultaneously. Frans, you have the floor.
Ladies and gentlemen, welcome to the 2021 annual general meeting of Royal Philips. As the pandemic continues to disrupt our lives, I am again unable to address you in person. Sadly, some countries such as India and Brazil are in heightened state of crisis with COVID cases surging. We will continue to support these countries with our critical care solutions. While this news is devastating, it's also encouraging to see that global vaccination efforts have accelerated in the last few months. Today, I will outline how Philips stepped up in 2020 to help fight the pandemic. I will also talk about our strategy and elaborate on our continued transformation into a solutions company to help our customers deliver on the quadruple aim of better health outcomes, improved patient and staff experience, and lower cost of care.
I will also walk you through our 2020 financial performance, as well as our enhanced commitment to doing business responsibly and sustainably. I will conclude with how we will further create superior value and improve the growth and profitability profile of Philips. When the pandemic struck early 2020, our immediate response was to step up to meet the critical needs of healthcare providers while safeguarding the health and safety of our employees and ensuring business continuity. We call this our triple duty of care, and it has worked out well. Wherever possible, we facilitated our employees to work from home. We took every effort to ensure that our production facilities and other business-critical activities remained fully operational. In some cases, we massively stepped up our production volumes, and our field service engineers continued to support customers throughout the crisis.
We were able to step up in these ways because of the enormous passion, dedication, and resilience of everybody at Philips, for which I am deeply grateful. These extraordinary efforts enabled us to meet the unprecedented demand for our critical care products and solutions. Health providers around the world urgently needed equipment such as CT systems, mobile ultrasound to help diagnose COVID-19 patients, as well as hospital ventilators, patient monitors, and informatics to treat, monitor, and manage COVID patients. Of course, in parallel, we continued to support health systems with the delivery of regular care, entering into more than 50 long-term strategic partnerships in 2020 to help transform healthcare by enhancing patient care and improving productivity. We also found new ways to serve consumers seeking to live a healthier life, prevent disease, and proactively manage their own health.
Overall, our product services and solutions improved the lives of 1.75 billion people in 2020, including 207 million people in underserved communities. The developments of the past year, in fact, validate our strategy to innovate the provision of care along the health continuum. Our customers have confirmed this to us, telling us that they want innovative solutions, combinations of systems, smart devices, software, AI, and services that can help them deliver on the quadruple aim of care. They are increasingly focusing on productivity and outcome-based models as well as new care models. COVID-19 has in fact accelerated the digitalization of care and the adoption of telehealth. This shift is being reinforced by global trends such as an aging population, the rise of chronic diseases, and resource constraints. Likewise, we see that consumers are much more concerned about their own health.
In recent years, we have invested significantly in data science, informatics, cloud technology to enable the delivery of integrated solutions across the health continuum and across care settings. These investments are now helping us to improve more lives. All of this requires a seamless integration of data, which is enabled by our secure, vendor-neutral HealthSuite digital platform. To further unlock full benefits of a data-driven care system, we continue to expand our capabilities in informatics and data science with around half of our research and development professionals working in these areas. I value telling you that we did not pause or delay our research and development spend and innovation roadmaps despite challenges posed by COVID-19.
As a result, and by way of example, in our Precision Diagnosis businesses, we were able to launch a vendor-neutral radiology operations command center, which enables our customers to virtualize imaging by setting up a unique model of operations to seamlessly extend their expert radiology talent across all sites. We received FDA clearance for the use of our ultrasound portfolio to manage COVID-19-related lung and cardiac complications. This includes our Lumify handheld ultrasound with Collaboration Live, the first truly integrated tele-ultrasound solution, providing users with remote access to clinical staff in real time. In our Image-guided therapy businesses, we launched the next generation of our leading-edge Azurion Image-guided therapy platform. This makes existing cardiovascular procedures more efficient and supports the development of new minimally invasive techniques to perform complex interventional therapies to treat, for example, stroke, lung cancer, and spine disorders.
In connected care, we introduced new ventilators such as our EV300 portable life support ventilator. We launched new data interoperability propositions such as our COVID-19 data portal. We also launched our new Tempus advanced life support remote monitoring and defibrillator solution for emergency medical care responders. This to help accelerate the delivery of care in emergency settings outside of the hospital. In personal health, we introduced a series of shavers featuring SkinIQ technology, which senses, guides, and adapts to the skin and facial hair for a close and more comfortable shave. We also launched the Philips One by Sonicare, a power toothbrush to expand into new consumer segments. Ladies and gentlemen, as we continue our transformation into a customer-first solutions company, we are guided by our strategic roadmap with its three strategic imperatives. Further improving the customer experience and operational excellence.
Boosting growth in the core by innovating to extend category leadership, geographic expansion, and deepening customer partnerships. Thirdly, winning with solutions to help professional healthcare customers achieve the quadruple aim and support consumers in their individual health needs. We aim to further drive customer preference by getting even closer to our customers and consumers, making Philips easier to do business with, and further improving our quality, operational excellence, and productivity. To do this, we are driving the digital transformation in every area of our business, from the way we connect and engage with our customers to seamlessly connect our solutions in the field. In our core businesses, we aim to drive growth through innovation, but also by capturing geographic growth opportunities and by continuing to pivot to consultative customer partnerships with new business models, which offer a deeper relationship with a higher level of recurring revenue streams.
We will continue the shift towards integrated solutions with demonstrable clinical evidence and health economic benefits. In doing so, we are leveraging data science and AI at scale. Where appropriate, we will continue to make acquisitions to support our strong organic growth profile. For example, to expand our connected care solutions, we acquired BioTelemetry and Capsule Technologies, further broadening our patient care management solutions for within the hospital, but also in the home. We acquired Intact Vascular to add an industry-first implantable device to our Image-guided therapy portfolio, optimizing the treatment of patients with peripheral artery disease. These are important steps in our strategy to become a leading solutions provider. Please note that our health technology innovations continue to generate a growing proportion of solutions-based sales and recurring revenues, which now stand at more than 40% of total revenue.
Finally, as part of our transformation, we have signed an agreement to sell our domestic appliances business to global investment firm Hillhouse Capital. We are pleased that we have found a good home for this business in line with our plans. With this transaction, we conclude our major divestitures. As ever, doing business responsibly and sustainably remains central and integrated to all that we do. 2020 was in fact the final year of our five-year Healthy people, Sustainable planet program, and I'm pleased that we delivered on all of the targets, making Philips one of the first health technology companies in the world that has become carbon neutral in its own operations, and delivering on our commitment to close the loop for large medical equipment. We now source 100% of our electricity needs from renewable sources.
We generate over 70% of our sales from green products and services, with 15% of sales coming from circular revenues. In addition, we recycle 90% of our operational waste and send zero waste to landfill. Of course, we continue to set the bar even higher. In 2020, we renewed our purpose to improve people's health and well-being through meaningful innovation, with the aim of improving 2.5 billion lives per year by 2030. That includes 400 million people in underserved communities. This is part of our enhanced, fully integrated approach to doing business responsibly and sustainably, which includes a comprehensive set of commitments across the environmental, social, and governance, or ESG, dimensions that guide us. I'm convinced that this is the best way for Philips to create superior long-term value for our many stakeholders. Let me now move on to our 2020 financial results.
Our company performance proved resilient in 2020. While some of our businesses were affected by lower demand, we were able to step up in others to significantly increase deliveries. It's clear that we had a challenging first half of the year. In the first quarter, our performance was predominantly impacted in China and Asia, while in the second quarter, when COVID-19 had spread across the world, our performance was impacted across all our markets. I'm pleased that within a few months, we were able to step up steeply production of critical care products and return to growth in the third quarter. We kept the momentum going throughout the fourth quarter. For the full year, this has resulted in a 3% comparable sales growth and an adjusted EBITDA margin of 13.2%. We also achieved a strong free cash flow of almost EUR 1.9 billion.
Moreover, driven by 9% comparable order intake growth, we continued to gain market share in our healthcare businesses and ended the year with a very strong order book. Philips' transformation has led to a structurally improved growth and profitability profile of the company. Philips' total shareholder return amounts to 120% since the year 2016, compared to 87% for the total shareholder return peer group and 25% for the EURO STOXX index. Given our performance and reflecting our confidence in the future, as well as the importance that we attach to dividend stability, we propose to maintain the dividend at EUR 0.85 per share, and that is, at the choice of investors, a scrip dividend. Looking ahead, we are of course eager to create further value. We have a clear strategy to grow, gain market share, and be successful.
The execution of our strategic imperatives will help us accelerate our growth profile from around 4.5% in the past few years to 5%-6% comparable sales growth going forward. As we have indicated previously, 2021 is going to be a transition year with low to mid-single digit sales growth, and that is given the comparison to 2020, where we had peaks in connected care demand as a consequence of COVID. We will continue to improve our profitability by 60-80 basis points on average per year, resulting in a high teens adjusted EBITA margin by 2025. At the same time, we will improve our free cash flow further to above EUR 2 billion and deliver an organic return on invested capital of mid to high teens by 2025.
I would like to remind you that our new targets are excluding the Domestic Appliances business, which is now accounted for as a business held for sale. In closing, ladies and gentlemen, COVID-19 has confirmed the direction in which we deliver innovative solutions to enhance end-to-end patient-centric care along the continuum of health, driving better health outcomes, higher productivity, and an improved patient and staff experience. Our strategy resonates with our customers, it is setting Philips on a higher growth trajectory, further unlocking value for our shareholders. As we pursue our purpose, we will create greater value for society by providing meaningful innovations to help people live healthy lives and build more resilient, sustainable health systems in all corners of the world. I've already extended my thanks to our employees.
I would also like to thank our customers, our suppliers, our partners for working together with Philips in the fight against the coronavirus. I wish to thank our shareholders for your confidence that you show in Philips. I look forward to continuing our commitment to improving lives and growing Philips together. Energized by our purpose and buoyed by the resilience and agility that I've seen over the past year, I'm confident that we will maintain our transformation momentum, truly impacting global health challenges through innovation, and continue to deliver growing value for our stakeholders. Thank you very much.
Thank you. Thank you, Frans. Thank you for your clear speech. That takes us to the annual report for 2020. That will cover agenda items 2A through TF. After a few introductory remarks, we will answer questions received. First, I'd like to make a single remark about the proposed dividend. That proposal aligns with the reservation and dividend policy from recent years. Since last year, the vote regarding the remuneration report is advisory. This report appears in the annual report for 2020. Now, I'm pleased to give the floor to Christine Poon, who chaired the Remuneration Committee, so that she can elaborate on this remuneration report. She will be addressing us in English. Christine?
Thank you, Jeroen. Good afternoon, and it's my pleasure to provide some highlights from the 2020 Remuneration Report for the Board of Management and the Supervisory Board. As a reminder, slide one illustrates the compensation structure for the CEO and other members of the Board of Management. The structure was approved at the shareholder meeting in 2020 and is comprised of three elements: base compensation, an annual incentive, and a long-term incentive grant. For our CEO, an on-target payout of his annual incentive is 100% of his base compensation, with a range of 0% payout at below-threshold performance and a 200% payout at maximum performance. The LTI grant is measured over a three-year period with a target vesting of 200% of our CEO's base compensation, and again, a range of 0% payout below threshold and a maximum vesting of 400%.
Annual incentive and LTI for our CFO and our CLO follow the same design, but are based on different targets and grant sizes, as you can see on the slide. The other point I'd like to make is our compensation design supports a pay-for-performance format, with 75% of our CEO's compensation package being variable, at risk, and tied to performance measures. Now, turning to the 2020 Remuneration Report. Specifically, I will highlight the key compensation decisions made by the Supervisory Board in relationship to the Board of Management. First, turning to the base compensation cycle. For our CEO and our CFO, the annual compensation was kept unchanged.
Our Chief Legal Officer received an increase of 3.5% to move his total compensation level closer to market levels, as well as to address internal relativities. As with all senior management at Philips, the salary increase was delayed from April 1st to October 1st, as part of the measures taken in response to the pandemic. As a result, the annual compensation of our CEO, our CFO, and our CLO as of October 2020 was set at EUR 1.25 million, EUR 785,000, and EUR 595,000 respectively. Turning to our annual incentive payout. For 2020, the incentive payout was comprised of 80% of the payout, was based on achievements against three financial metrics: comparable sales growth, EBITDA, and free cash flow targets. The other 20% of the payout was based on performance against individual targets in the areas of strategy, execution, quality and operational excellence, and people and organization.
The actual incentive payout was slightly below target in 2020, driven by below-target financial performance on comparable sales growth and EBITDA, whereas free cash flow performance was above target, and average individual performance was rated above target. Overall, the supervisory board would like to commend the board of management on their strong performance in 2020, especially given the exceptional challenges caused by the COVID-19 pandemic. Slide two shows the payouts of 98%, 78%, and 73.6% for our CEO, our CFO, and our CLO, respectively. Turning to the LTI plan. The 2018 performance share LTI grant vested in April 2021. In early 2021, the remuneration committee approved the payout of 125% of target. This payout was based on an equal weighting of total shareholder return and adjusted EPS performance over the three-year period 2018 to 2020.
The TSR payout was 140% of target based on Philips rank of [9] of 20 companies in our performance peer group, and the adjusted EPS payout was 110% of target. Our remuneration policy allows adjustments to EPS to include changes to accounting principles, non-recurrent events that were not foreseen at the time of setting targets, and generally events that were deemed to be outside the control of management. Overall, the adjusted EPS this year amounted to EUR 1.45. That concludes my discussion of the 2020 remuneration report. I turn it back to you.
Thank you, Christine. [Non-English content ] Thank you, Christine. The financial statements for 2020 were audited by EY, our external auditor. The annual report published on the website includes the usual statements from EY. Ladies and gentlemen, we will now answer some questions submitted prior to this meeting. We received some questions from Eumedion, the VEB Investors Association, the Association of Investors for Sustainable Development, abbreviated as VBDO, and GVC Gaesco, a Spanish sustainability asset manager. First, I will give Frans the floor.
Thank you very much. I will answer the questions individually, and you'll see the questions projected on the screen as well. The first questions are from Eumedion, and their first question concerns the sale of domestic appliances to Hillhouse Capital, and they ask for an explanation as to whether Hillhouse Capital is involved with Uyghurs in Xinjiang, China, and whether we performed a due diligence with respect to this party.
My response is that, of course, we conducted a due diligence investigation and that Hillhouse Capital does not invest in any company that could possibly be associated with the activities in the Xinjiang province in China. In addition, Hillhouse Capital is a renowned international investment fund with a long-term focus on growth. Their capital derives in part from Ivy League universities such as Yale, Princeton, and University of Pennsylvania, and they have extensive expertise in online sales outlets and the digital transformation that may certainly benefit domestic appliances. The second question from Eumedion relates to diversity within our firm, especially gender diversity. Eumedion asks which steps we have taken to promote progression of women and to consider recruitment in that respect. I can tell you that Philips is achieving good progress in gender diversity, especially among the senior staff, and beneath that level, we were already highly diverse.
We have various training programs that start with recruiting new staff, and we also do unconscious bias training, which has made us better able to retain. Women talent and to recruit women talent at Philips. I'm pleased to tell you that the percentage of women in higher positions at Philips has increased to 27%, which exceeds the 25% target we set for last year. We are well on track, but I am keenly aware that there's still some work to be done, and we should continue at full strength to get to a much higher percentage. I'll continue with questions we received from the VEB.
The first question from the VEB addresses geopolitics. They ask how Philips can protect itself from threats in that area, in what measure Philips is building more local factories, whether that affects stocks, whether that, in turn, will impact EBITDA margin and return on invested capital. That's an excellent question. I'm pleased to reply. We do see those geopolitical tensions, and we expect them to endure for a while. We are considering them in our manufacturing and supply chain strategy, and we have stepped up our regional production. We have a strategy with about 30 large factories distributed among the U.S., Asia, China, Europe, and to some extent, also in Latin America. That gives us a good geographical spread. Please note, however, that our network of suppliers is global, and we see that in the semiconductor situation that there may be scarcities.
This will not have a negative impact on our EBIT and return on invested capital. The second question from the VEB relates to recurring revenues and the fact that financial markets often value companies higher if they have a higher share of recurring revenue. We certainly understand that and identify with that. We expect that revenue from solutions and recurring income flows will continue to post double-digit growth. That strategy is thriving. We have already exceeded 40% in 2020, and we envisage ongoing growth to at least 50% of Philips' revenue by 2025. We will achieve that in part by focusing on solutions, combination systems, smart devices, AI software, and services with long-term contracts. Examples abound. I can tell you one relating to integrated interventional suites used by hospitals to perform operations.
The third question from the VEB is about sale of domestic appliance operations to the Chinese investment company, Hillhouse. The VEB wants to know what Philips will do with the proceeds. My answer is that basically, we have already allocated a large share of the proceeds from the sale. In recent months, we have reinforced our Image-guided therapy business with the company Intact Vascular, and we have also strengthened our connected care business by acquiring BioTelemetry and Capsule Technologies. These acquisitions exceed EUR 3 billion. In addition, we still have a EUR 1.5 billion share buyback program in progress, which is expected to lead to an additional cash flow of EUR 750 million in 2021. Now, perhaps as a side remark on that, Philips is basically focused on organic growth. We're not talking only about mergers and acquisitions.
That higher growth expectation results from our investments in R&D. If we see good candidates for acquisition, we'll certainly take a look at them, and we're receptive to that. The next question relates to the goodwill section in the annual report. Here, the growth assumptions for the Image-guided therapy, CGU, have been adjusted. How does this relate to a negative expectation is the question from the VEB. That's an excellent question. Basically, this relates to a change in the method of calculating growth expectations over a four-year period instead of over a three-year period. Without that changed method, the growth expectation would have been the same. We also indicated that at our recent Capital Markets Day last year. We said there that revenue in image-guided therapy in 2025 will reach high single digits and that the adjusted EBITDA margin will exceed 20%.
In that sense, I'm already saying that our image-guided therapy is doing well. The business also grew in Q1 of this year by double digits, all driven by the original acquisitions of Volcano and Spectranetics. When we purchased those companies, they were loss-making, and now they're posting double-digit growth and achieving an EBITDA margin of approximately 15%. These are exemplary acquisitions. The next question relates to the acquisition of the U.S. BioTelemetry, which we purchased for roughly $2.8 billion. The VEB's question is, "This is 6.4x the revenue. How do you reconcile that with value creation? Do we expect achieving a mid to high teens ROIC?" Our answer to this question is that we think that the acquisition of BioTelemetry aligns very nicely with our corporate strategy. BioTelemetry is a strongly growing component with excellent profitability profile, and the market segment of remote patient monitoring will remain fast-growing.
In that segment, BioTelemetry is the market leader and the only profitable party. BioTelemetry has a leading services platform for patients with arrhythmia. In Philips, we envisage opportunities to roll this out beyond the United States and to apply patient monitoring to other diseases and disorders. We therefore expect double-digit growth and an adjusted EBITDA margin in 2021 that will continue to rise. In 2025, we expect it to exceed 20%. Within five years, the return on invested capital is expected to exceed our Philips WACC. Now to the questions from the VBDO. They compliment us on our circularity policy. Thank you. Mentions that we have stipulated clear objectives, but the VBDO also asks how we'll be dealing with the critical commodities and raw materials, and asks us whether we're tracking that and whether we will be publishing that as well.
My answer to that question is that by 2025, we aim to be circular for all healthcare equipment supplied by our customers. We co-founded the European Partnership for Responsible Minerals. In our eco design, we focus on making materials more sustainable. Regarding the specific question as to whether we track the use of critical raw materials in our products, for example, through a materials passport, we're not doing that yet today, but we are exploring whether we can include the critical raw materials in our eco design program and itemize them because that is a good course. The second question from the VBDO relates to working conditions in the value chain at our suppliers via our Beyond Auditing program, and the VBDO is curious how that program is doing and also proposes that we disclose more about the use cases and what we find among those suppliers.
My answer to this question is that in the 2020 annual report on page 265, we have featured a new table that depicts year-on-year improvements among our suppliers active in this program. Details appear there for the categories achieving the greatest improvements. We already disclosed the greatest challenges and progress there. In 2020, for the first time, we also disclosed the number of zero tolerance we found among suppliers. Those are situations where we say, "That is unacceptable, and if you don't improve, you won't be our supplier anymore." We've also indicated how quickly and in what measure they were solved, all on page 264 in the annual report. The suggestions from the VBDO are very welcome, and we will certainly consider whether we can disclose those case studies anonymously to show how we deal with zero tolerance.
Next question from the VBDO is about inequality relating to gender, ethnicity, and other factors, not only at the workplace but also in application of our products and how this relates to medical treatment. This is an excellent question, especially because artificial intelligence will increasingly be applied in those products. In response to this question, we are certainly aware of this, but we believe that thus far in our products, there is no bias. Since we will be applying big data and artificial intelligence increasingly in our products, the topic is very relevant. We have therefore formulated ethical principles on artificial intelligence. We've published them, and we will abide by them to avert any bias or discrimination in this type of applications. Chairman, that takes me to the last question from the Spanish Sustainable- Sustainability asset manager GVC Gaesco.
Question of GVC Gaesco is related to our CO2 emissions. The question is: are the reduction objectives for the entire value chain not too modest? What are the challenges that you see to accomplish perhaps a bigger reduction? My answer to your question is that I would like to clarify that we have, on the one hand, an annual revenue growth of 5%-6% in the coming years, which in fact increases the CO2 related to the use of our products. On the other hand, we are reducing by creating more energy-efficient products. The sum of those two factors result in a 4% reduction of the absolute CO2 emission over our entire value chain by 2025 compared to 2017. We are the first health technology company to have our emission targets approved by the Science Based Targets initiative.
Which is a collaboration, as you probably know, between the CDP, United Nations Global Compact, and the World Resources Institute, and the World Wide Fund for Nature. We want to be completely transparent about it. In fact, most of our footprint is in the use phase of our products. Therefore, our eco design efforts will lead to energy efficiency in our products, which then results in a reduction of Scope 2 and 3 emissions. With that, I've come to the end of the list of submitted questions. Chairman, back to you.
Thank you, Frans. There were as well two questions regarding remuneration. I ask Christine Poon, the Chair of the Remuneration Committee, to answer those questions. Over to you, Christine.
Thank you. The first question comes from Eumedion, and it had to do with a question about the adjustment of EPS targets and an explanation of why these adjustments have been made. As you know, our remuneration policy and our LTI plan allows us to use adjusted earnings per share as part of our measurements. The adjustments that we make to EPS include changes due to accounting principles, non-recurring events that were not foreseen when we first set targets, and generally events that were deemed to be outside the control of management. In 2018 and 2019, these principles actually led to a downward adjustment to EPS of EUR 0.16 and EUR 0.30 respectively. Then in 2020, it led to an upward adjustment of EUR 0.16. In 2020, the vast majority of our adjustments were related to the impact of divestments and acquisitions.
The Remuneration Committee and the supervisory board make highly disciplined decisions around these adjustments. For example, we did not include any adjustments this year relating to the pandemic. The second question comes from GVC Gaesco, and it has to do with providing more detail on the sustainability objectives that we use to determine the 10% remuneration for the CEO as part of his LTI plan. As you know, this 10% sustainability objective was first designed into the LTI plan beginning in 2020, for the three-year period ending in 2022. 2023, sorry. Philips believes that the sustainability performance will improve the company's performance as a whole. In our LTI plan, we have three sustainable goals as defined by the United Nations. That's number three, number 12, and number 13. These are lives improved, as Frans just mentioned.
The operational carbon footprint, and to accelerate the transition to a circular economy, circular revenues, zero waste to landfill, and closing the loop. For the purpose of the target-setting process, our sustainability strategy is transposed into three-year targets based on our latest projections and insights. As there is a certain degree of uncertainty embedded in these numbers, we then will use a target range rather than a fixed target as we assess performance against these particular metrics. I'll turn it back to you, Jeroen.
Thank you, Christine. Now we have the opportunity to ask next questions. A few shareholders are online. The contact is by means of the screen of Loes Meerburg, the Secretary of the Supervisory Board. I'm checking with Loes. Loes, is there anybody I could give the floor?
Yes, Chair. Mr. Keyner of the Dutch Association of Shareholders.
Mr. Keyner, I see you on screen. The floor is yours, and I also see that somebody else is waving their hand.
Yes, Mr. Chair. Thank you for allowing me to ask an extra question on behalf of the VEB, the Dutch Association of Shareholders. I support Philips. I believe in the strategy that you've started a few years ago with a focus on healthcare. I am a great supporter of businesses that try to achieve a large part of the revenue by recurring revenue because it gives a boost to the achievements of the company on the stock exchange. I have a question which is about the fundament of your strategy, which is digitization. It is not just a huge opportunity for Philips. It's an essential opportunity that you grasp, but there's a risk attached to it that your customers may be the target of people with bad intentions, cybercriminals.
The question that I have is, does Philips run a risk with regard to liability when customers are targeted by cybercriminality? Maybe you can say something about that, and maybe the way in which you try to protect your customer and yourselves against it.
Well, Mr. Keyner, indeed, it's a very relevant question, and it is true that hospitals are often targeted by cybercrime. Hospitals often are vulnerable in their IT systems. Health technology products by Philips all have embedded computers, and therefore, they are potential targets, too. We design our products, therefore, with the highest level, highest standards of cybersecurity, and our maintenance contracts with the hospitals ensure that we stay up to date of virus protection. To an increasing extent, hospitals ask us to do even more. We see an opportunity for the business to provide services, to offer services to assist hospitals to have a better defense against cybercriminals. I do recognize what you say. It's an important item, and it has our attention. We develop activities in that field, and we are working very hard to create it into a business opportunity.
Thank you. I'm checking with Loes.
Mrs. Reike.
Mrs. Reike, the floor is yours.
Reike from the VBDO. First of all, I would like to thank that it is possible at all to ask follow-up questions today live at the AGM. This is not enabled by a lot of companies this year. This is really nice opportunity for us. I would also like to get back to the topic of the sale of the domestic appliances division to Hillhouse Capital, which is a popular topic it seems this year. We understand that this move is perfectly in line with the shift in products towards more high value and high margin-oriented portfolio. We see also that from a circular economy point of view, that makes a lot of sense because these products tend to have more opportunities for being used over multiple life cycles, potentially.
Now that we see that Domestic Appliances is being sold, which are traditionally rather products that are lower value products and where it is more difficult to reuse and recycle. Where Philips in the past has always played its front runner role in pushing the industry forward, we are worried whether this will continue under Hillhouse Capital and that also ultimately Philips' reputation could potentially suffer if this was not going to be the case. Our question is, has Philips put in place any mechanisms to ensure that circularity in specific, but also sustainability more generally, thinking of employment contracts, conditions, et cetera, remain intact and effective, and that also for a longer time span, so not the usual transition period of a year or two, where sometimes such commitments are being made? This is our question. Thank you very much in advance for going into this.
Frans, over to you. Yeah. Mevrouw Reike. Frans, up to you.
In fact, the Domestic Appliances business has a leadership position also in sustainability. Many of the products of Domestic Appliances use, for example, recycled plastics and are more energy efficient than competitors. We position Domestic Appliances in the sale process as a green proposition. This was appreciated by the various parties that were interested. This applies to Hillhouse Capital. To not only count on good intentions, we have in our contract with Hillhouse, also a brand license agreement that, as you could have read in the press, lasts for 15 years and is renewable. This brand license agreement comes with all sorts of conditions on quality, on brand positioning, and also around sustainability.
In this way, we try to anchor the good intentions and commitments of the parties also on a long-term basis, because indeed, it is, as you say, the Philips reputation also depends on how our brand licensees behave. We think that we have taken appropriate measures to assure this. Thank you.
[Non-English content] . I'm checking with Loes whether more questions have arrived. No.
No other questions. I'm checking on screen what I can see.
Yes. Thank you. I now conclude the substantial representation of item on the agenda number three, online voters will be able to vote throughout the meeting. We will show you all the results of the votes after we've addressed all the items on the agenda. I move on to item three on the agenda. This item on the agenda is a proposal to reappoint Mr. Marnix van Ginneken as a member of the Management Board as of the 6th of May 2021, which is today. I will explain this proposal. In 2014, Marnix became Chief Legal Officer, and he became a member of the Executive Committee then. As of 2017, he's also been a member of the Management Board.
The supervisory board recommends his reappointment because he has a wide knowledge of Philips. He has comprehensive expertise in the field of international corporate governance, and he played an important role in the executive committee ever since 2014. For further arguments, I would like to refer to the explanation to the agenda and the binding nomination that the supervisory board has drafted. We have not received any questions beforehand about the nomination of Marnix van Ginneken. As I've stated, votes will take place at the same time. This means that I will move on to the next item on the agenda, and I will provide an opportunity to ask consecutive questions later on. The next item on the agenda is the composition of the supervisory board. The supervisory board proposes to appoint Mrs. Chua and Mrs. Nooyi as members of the supervisory board as of the sixth of May, today.
These proposals have been substantiated in the explanation of the agenda and the binding nominations drafted by the Supervisory Board. I will briefly elaborate on that. Mrs. Chua has in-depth knowledge in the field of information technology and digitization. She used to be the CEO of Singapore Telecommunications Limited, Singtel, which is a leading communication technology group in Asia. Prior to her appointment as CEO of Singtel, Mrs. Chua held various leading positions, including the one of CFO. Indra Nooyi is a proven leader in consumer and technology, and she has a very strong track record in providing profit growth in a sustainable and responsible way. She is the former chair and CEO of PepsiCo, a worldwide food and drinks company. Prior to her appointment as CEO, Mrs. Nooyi had various leading positions, which include the position of CFO.
Prior to the nominations, we received no questions about these nominations of the ladies, Chua and Nooyi. Perhaps there are consecutive questions of the shareholders that are present online. I'm checking with Loes Meerburg whether there's anybody that I can give the floor. Mrs. Reike, you are still raising your hand. Is it for this session?
No.
Okay, it's an old hand, as we say nowadays. Okay, nobody has questions. I now finalize the discussion of agenda items three and four, and I move on to item on the agenda five, which is the annual authorization to issue shares or acknowledging rights to acquire those and limiting or excluding preferential rights. There are two items to vote on. These are separate.
This item on the agenda is on the agenda every year because we only receive an authorization for 18 months. I assume that further explanation is not required. I'm just checking with you. No, thank you. I move on to item on the agenda six. This item on the agenda pertains to authorization of the management board for 18 months with approval of the supervisory board to buy shares. This is a purchase authorization that you grant us every year to buy own shares. This year, we propose an authorization once more within the limits and conditions as stated in the agenda and the explanation thereof. It applies that the company cannot buy more than 10% of the outstanding shares and maintain these, plus 10% of the issued share capital on the same date related to the share buying programs for capital decrease targets.
Furthermore, I would like to address item on the agenda seven, which is the withdrawal of shares. It's about withdrawal of ordinary shares in the capital of the company that have been purchased or will be purchased by the company based on the authorization that we proposed in the prior item on the agenda. I refer to the explanation on the agenda in respect of this item. We have not received any questions beforehand about items on the agenda five, six, and seven that have just been discussed. Maybe shareholders online have asked questions. I'm checking once again with Loes.
No, I see no questions.
No, I see no questions either. Thank you. I would now like to move on to formal statements by the notary who is present here. As soon as I've finalized, I will close the voting procedure. We will have to wait for one minute for the results. The reason for that brief break is that online voters are looking at the meeting by the webcast, and there's a small delay. From the preparation of this meeting, the notary noticed that all the requirements by the Articles of Association and the law have been observed so that the meeting is authorized to take legally valid decisions on all the items on the agenda. From the results of the notary, it appeared that a capital was represented of EUR 126,897,000. This entitles to 634,485,000 votes.
This represents 70.09%, so say 70.1%, of the issued capital with voting rights represented at the meeting or present at the meeting. Finally, I can state that the Management Board and the Supervisory Board have not received any proposals for the agenda for any shareholders. The voting procedure has now closed. I will wait about one minute now. Do we have the results of the vote? The results of the vote are now known. They are shown on the screen and will be posted on our website after this meeting. The first is 2B, the proposal to adopt the financial statements. As you see, 99.9% of the votes was cast in favor, so the proposal has been adopted and the financial statements for 2020 have hereby been adopted. 2C, proposal to adopt a dividend.
You see that the votes cast in favor were 99.47% of the vote, so the proposal has been adopted and the dividend has been determined. Now, 2D, the remuneration report. You see that nearly 84% of the votes has been cast in favor, so I note that the remuneration report has been approved. 2E, this is the proposal to discharge the members of the Board of Management. You see 97.37% was cast in favor granting the discharge to the members of the Board of Management. 2F, proposal to discharge the members of the Supervisory Board. You see the same percentage, 97.37%, and discharge has thereby been granted to the members of the Supervisory Board. Agenda three, the reappointment of Mr. Van Ginneken has been approved with 99.84% of the votes cast in favor.
Congratulations, Mr. Van Ginneken. You have been reappointed for the record. Agenda item 4A, proposal to appoint Mrs. Chua as a member of the Supervisory Board. Votes cast in favor, 99.65% adopt, so the proposal to appoint Mrs. Chua has been adopted. The proposal to appoint Mrs. Nooyi as member of the Supervisory Board. The proposal has been approved with 99.6% of the votes cast in favor. Mrs. Nooyi has hereby been appointed. Congratulations to both ladies. Agenda item 5A, authorization of the Board of Management to issue shares, 99.7% cast in favor. The proposal has been adopted. Agenda item 5B, authorization of the Board of Management to restrict or exclude
The rights. You see that 94.54% was cast in favor, so the proposal has been adopted. Agenda item six, authorization of the Board of Management to acquire shares in the company, 97.4% was cast in favor. The proposal has been adopted. Agenda item seven, cancellation of shares by the Board of Management of some shares in the company. This proposal has been adopted with 99.92% of the votes cast in favor. That covers all agenda items. I have a final word I'd like to share. As I indicated at the start of the meeting, we will now briefly address a few changes within the Supervisory Board. I'm pleased to give the floor to our CEO, Frans van Houten, to start with that.
Thank you, Mr. Chairman. Thank you, Jeroen. I'm pleased to share a bit from the Philips Executive Committee. Jeroen, in 2019, you joined the Supervisory Board and served three four-year terms. When I joined as CEO in 2011, I experienced you and saw how you led the firm and supervised it, and were an excellent example of stewardship of the Supervisory Board. Those were very important years of transformation at Philips, we've grown into leader in health technology during that period. I would like to express special appreciation for your style, the firm is grateful to you and personally and as the CEO, I'm grateful for the way you did this and the confidence you gave, as well as the coaching, your confidence in coaching.
Thank you, Frans.
Just a moment, I'm not done. I'd also like to express my gratitude for the contribution and advice from Christine Poon, Deputy Chair of the Board. For years, we have worked together and have benefited from Christine's wisdom. We are also grateful to Orit Gadiesh for her years of contributions to the supervisory board and strategic insights and her enormous support in the radical transformation in the firm. Your wisdom and your support. To wrap up, I'd like to express my great joy that Feike Sijbesma will be the new Chair of the Supervisory Board. Feike, I'm greatly looking forward to working with you on the firm's growth as leader in health and technology, and to deliver on the purpose of the firm in improving people's lives.
Thank you, Frans, for your very kind words. It's been a privilege for 12 years to serve, first as a member of the supervisory board and later as Chair. It's been a great privilege since 2009 to be able to serve this company, and I have done that with great enjoyment, and I'm also grateful to Christine and Orit. It's strange in this age of corona, I can't even see them on screen, For your information, I have conducted extensive phone conversations with both over the past weekend to thank them for their pivotal role in the supervisory board. Feike, you have the floor.
Thank you, Mr. Chairman. Thank you, Jeroen. On behalf of the entire supervisory board, I thank you for having served as a chair at Philips for several years. We are very grateful for the way you have chaired the supervisory board over the past years at Philips. Especially important steps were taken toward leadership in healthcare. It's a great honor to follow in your footsteps, Jeroen. I'm also grateful to Orit Gadiesh and Christine Poon. I look forward to working with the entire supervisory board and the executive management under the aegis of Frans van Houten.
Ladies and gentlemen, this is the moment. Well, I don't have a hammer to hit, so I'm going to virtually hand over to the new chair, and I'm convinced, and I'm also confident that you will be an illustrious chair of the supervisory board. I wish you all the best, and I am pleased to close this general meeting.