Business Context and Reporting Period
This Form 8-K Current Report was filed by Baxter International Inc. on September 29, 2023, with the earliest event reported on that same date. The filing primarily addresses the appointment of a new Chief Financial Officer and the departure of the interim CFO.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on executive compensation and personnel changes.
Material Changes
The material change reported is the appointment of Joel T. Grade as Executive Vice President and Chief Financial Officer, effective October 18, 2023. Consequently, Brian Stevens will cease serving as interim CFO on that date, though he will remain as Senior Vice President, Chief Accounting Officer, and Controller.
Management Commentary and Compensation Details
Mr. Grade, 53, joins from Sysco Corporation where he served as CFO from 2015 to December 2020. His compensation package, detailed in an offer letter dated September 26, 2023, includes:
- Base Salary: $800,000 annually.
- Annual Bonus: Target of 100% of base salary, with a prorated opportunity for 2023.
- Long-Term Incentives (LTIP):
- Annual grant starting in 2024 with a target value of $3,600,000.
- Two one-time grants made after October 18, 2023:
- Grant 1: Target value of $3,600,000 (50% PSUs, 25% RSUs, 25% stock options). PSUs cover the performance period Jan 1, 2023, to Dec 31, 2025.
- Grant 2: Target value of $1,000,000 (100% RSUs).
- Vesting: One-third per year over three years for RSUs and options.
- Supplemental Cash Payment: One-time payment of $500,000 after 90 days of employment. This is subject to full repayment if he resigns or is terminated within 12 months, and 50% repayment if within 12 to 24 months.
- Benefits: Participation in standard executive benefit plans, including the Executive Severance Plan and Change in Control agreement.
Investor Verification Checklist
- Verify the effective start date of Joel Grade as CFO (October 18, 2023) and the transition of Brian Stevens.
- Review the attached Exhibit 10.1 (Offer Letter) for the full legal terms of the compensation package.
- Confirm the vesting schedules and performance metrics for the $4.6 million in one-time equity grants.
- Monitor the repayment conditions for the $500,000 supplemental cash payment.