Baxter International Chair, President and CEO José Almeida’s pay dropped last year as the company integrated Hillrom after acquiring the company for $12.5 billion in December 2021.
The deal made Deerfield, Illinois-based Baxter (NYSE: BAX) the world’s 10th-largest medical device company, according to Medical Design & Outsourcing’s Medtech Big 100 ranking by annual revenue.
But Baxter recorded a $3.1 billion impairment related to Hillrom last year, resulting in a full-year net loss of $2.4 billion. This year, Baxter announced plans to spin off its renal care and acute therapies units as an independent, publicly traded company, and followed up with layoffs and other cost-cutting moves, a cap on cash severance payouts for executives, and leadership changes.
Most recently, the company disclosed lower pay for Almeida, whose total compensation dropped 13% to $13.6 million in 2022, according to the company’s latest proxy filing with the Securities and Exchange Commission.
Almeida’s pay package includes a $1.3 million salary, $11.5 million in stock and option awards and $675,675 in cash bonuses. He also received $121,773 in other compensation, including $100,796 of deferred compensation contributions and $19,825 of retirement plan contributions.
Almeida’s option awards shrank $2.7 million (a 49% decrease) compared to 2021, and his cash bonus was $1.7 million smaller (a 71% decrease).
“We are building for the future on a strong platform,” Almeida wrote in this year’s letter to Baxter stockholders. “Our products are fundamental to healthcare worldwide, making a difference each year for an estimated 350 million patients across more than 100 countries. Our multiyear transformation has fortified our strength, agility and resilience. Notwithstanding the operational challenges of 2022, we have maintained a disciplined and deliberate capital allocation strategy staying squarely focused on our priorities to further deleverage and optimize our balance sheet while continuing to drive innovation and growth and return value to stockholders.”
Pay climbs for other Baxter executives
Baxter reported higher pay for three other executives and a big incentive to bring on a new hire.
The second-highest-paid Baxter executive was EVP and Chief Financial Officer James Saccaro, whose total compensation increased 84% to $8.2 million, primarily due to a 293% increase in stock awards to $6.1 million.
EVP and Chief Operating Officer Giuseppe Accogli followed, with a total compensation increase of 34% to $7.9 million, primarily due to a 173% increase in stock awards to $5.9 million.
SVP and EMEA President Cristiano Franzi’s total compensation was $5.3 million, up 19%. That was again primarily due to a 130% increase in stock awards to $3.3 million.
SVP and General Counsel David Rosenbloom’s total compensation was $5.6 million, making him the fourth-highest-paid Baxter executive. The former federal prosecutor joined Baxter in April 2022 after a 24-year career at law firm McDermott Will & Emery. His total compensation included a $2.5 million equity grant in connection with his hiring.
Baxter employee pay
Baxter’s proxy filing also included its CEO pay ratio. The SEC requires publicly traded companies to calculate a pay ratio showing how much the CEO makes compared to the median employee.
Baxter estimated its median employee wage at $46,830, up slightly from $46,351 in 2021. That latest median wage and Almeida’s $13.6 million pay package puts Baxter’s CEO compensation at 290 times more than the median employee’s pay. That’s down from last year’s 337:1 ratio.
“Due to the company’s acquisition of Hillrom in December 2021, the company’s employee population has changed significantly,” the company said.
Before acquiring Hillrom, Baxter had around 50,000 employees at the end of 2020, including about 13,000 employees in the U.S. Those figures increased to 60,000 and 19,000, respectively, at the end of 2021 and remained unchanged at the end of 2022.
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