Brent Shafer

About Brent Shafer

Brent Shafer, age 67, is Baxter’s Chair of the Board and Interim Chief Executive Officer as of February 3, 2025; he has served as a Baxter director since 2022 and previously served as Lead Independent Director from April 2023 until his interim appointment. He is the former Chair and CEO of Cerner Corporation (2018–2021) and held senior leadership roles at Philips (including CEO of Philips North America and CEO of Philips Home Healthcare Solutions), Hillrom, GE Medical Systems, Hewlett Packard’s Medical Products Group, and Johnson & Johnson. He currently serves on the boards of Tactile Systems Technology, Inc. and Veracyte, Inc. .

Past Roles

Organization	Role	Tenure	Committees/Impact
Cerner Corporation	Chair & Chief Executive Officer	2018–2021	Led digital health transformation at a major health IT provider
Philips North America	Chief Executive Officer	Not disclosed	Led North America operations for Philips
Philips Home Healthcare Solutions	Chief Executive Officer	Not disclosed	Led home healthcare solutions business
Hillrom	VP & GM, Patient Care Environment Division	Not disclosed	Senior operating leadership in medical devices
GE Medical Systems	Senior roles in sales, marketing, general management	Not disclosed	Commercial and general management leadership
Hewlett Packard – Medical Products Group	Senior roles	Not disclosed	Medical products leadership
Johnson & Johnson	Senior roles	Not disclosed	Senior leadership experience

External Roles

Organization	Role	Tenure	Notes
Tactile Systems Technology, Inc.	Director	Current	Public company board service
Veracyte, Inc.	Director	Current	Public company board service

Board Governance

Status: Non-independent director (Chair & Interim CEO). Nine of ten directors are independent; all committee chairs and members are independent.
Committee assignments: None (as Chair & Interim CEO). Previously served as Lead Independent Director (Apr 2023–Feb 3, 2025).
Lead Independent Director role: Robust responsibilities (executive sessions, agenda/schedule approval, independent director meetings, CEO evaluation, succession leadership, shareholder engagement) now held by Nancy M. Schlichting.
Executive sessions: Held at every regularly scheduled Board meeting in 2024; led by Mr. Shafer while LID. Topics included macro conditions, operational challenges, portfolio optimization, capital allocation, and succession planning.
Attendance: In 2024 the Board held 9 meetings; each director attended at least 75% of Board and relevant committee meetings; all directors participated in the 2024 annual meeting.
Stockholder engagement: Following the 2024 AGM through early 2025, select directors including Mr. Shafer met with investors representing ~30% of outstanding shares; outreach targeted >60% of shares.
Overboarding policy and waiver: Baxter limits boards to two for full-time executives and four for others; Mr. Shafer received a waiver to continue service on two outside boards during his Interim CEO term after the NCGPP Committee assessed time commitments and independence.
Chair/CEO structure: Board determined combined Chair/CEO structure serves stockholders’ best interests during CEO transition; policy states future permanent CEO transition should result in an independent Chair absent a contrary Board determination.

Fixed Compensation

2024 Non-Employee Director Compensation (Brent Shafer)

Component	Amount (USD)
Fees Earned or Paid in Cash	$172,000
Stock Awards (Grant Date Fair Value)	$214,986
Total	$386,986

2024 Director Equity Grant Details

Grant Type	Shares Granted	Vesting	Notes
Fully vested Baxter shares	5,952	Vested at grant; six-month forfeiture period if service ends (except death/disability/qualifying retirement)	Annual equity grant valued at $215,000 in 2024; deferral election available under director deferred compensation plan

2025 Director Cash Compensation Program Changes

Cash Compensation	2024	2025
Annual Cash Retainer	$100,000	$120,000
Committee Meeting Fee (per meeting)	$2,000	$0
Lead Independent Director Retainer	$50,000	$50,000
Audit Committee Chair Retainer	$25,000	$25,000
CHC Committee Chair Retainer	$20,000	$20,000
QRC Committee Chair Retainer	$15,000	$20,000
NCGPP Committee Chair Retainer	$15,000	$20,000
Operating Committee Chair (stipend)	NA	$20,000 (upon specified events)
CEO Search Working Group Chair (stipend)	NA	$10,000 (upon permanent CEO appointment)

Interim CEO Compensation (effective Feb 3, 2025)

Component	Terms
Base Salary	$1,300,000 annualized ($108,333.33 per month)
Bonus	$600,000, payable upon earlier of six-month anniversary of CEO Transition Date or successor CEO start
Equity	RSUs with target grant value of $2,500,000 granted Feb 5, 2025; vest upon completion of Interim CEO term
Perquisites	Company aircraft or charter for required business/commuting travel; tax gross-up to "make whole" for commuting-related taxable income (including taxes on gross-up); personal non-commuting use reimbursed per Aircraft Time Sharing Agreement

Performance Compensation

2024 Annual Incentive Program performance metrics (for NEOs): Patient Safety & Quality (40%), Best Place to Work (30%), Growth Through Innovation (30%). Clawbacks under Mandatory Clawback Policy and Compensation Recoupment Policy apply to annual and long-term incentives. Note: Mr. Shafer’s Interim CEO bonus is fixed at $600,000 rather than tied to MICP metrics.

Metric Category	Weight (%)
Patient Safety & Quality	40%
Best Place to Work	30%
Growth Through Innovation	30%

Long-term incentives: Directors receive fully vested share grants (subject to six-month forfeiture period); executives generally receive mix of options, RSUs, and PSUs with clawback applicability; company prohibits paying DEUs on unvested RSUs/PSUs prior to vesting.

Other Directorships & Interlocks

Company	Role	Committee Roles (if disclosed)	Notes
Tactile Systems Technology, Inc.	Director	Not disclosed	Healthcare device focus; public company board
Veracyte, Inc.	Director	Not disclosed	Diagnostics company; public company board

Overboarding evaluation: NCGPP Committee reviewed Mr. Shafer’s outside board service and granted a waiver during his Interim CEO term; deemed not to impair effectiveness.

Expertise & Qualifications

Significant experience leading, operating, and transforming global healthcare and health IT organizations; strong digital health capabilities from Cerner and Philips leadership roles.
Prior governance leadership as Baxter’s Lead Independent Director with responsibility for executive sessions, meeting agendas, CEO evaluation, and shareholder engagement.
Board skills matrix identifies Mr. Shafer’s contributions across M&A/transactional, international and human capital management competencies.

Equity Ownership

Holder	Shares of Common Stock	Shares Under Exercisable Options	Ownership % of Outstanding
Brent Shafer	89,841	0	<1% (none of directors/officers exceed 1%)

Director stock ownership guidelines: After five years of Board service, each director is expected to hold Baxter stock equal to five times the annual Board cash retainer; directors are prohibited from hedging or pledging Baxter securities. As of Dec 31, 2024, all directors with ≥5 years of service were in compliance.
Deferred compensation: Directors may defer cash and equity under Baxter’s director deferred compensation plan.

Governance Assessment

Strengths:
- Prior Lead Independent Director tenure with robust oversight (executive sessions, CEO evaluation, succession planning) and active stockholder engagement, supporting investor confidence in board effectiveness.
- Fully independent committees; independent committee chairs; rigorous director ownership and anti-hedging/anti-pledging policies.
Concerns / RED FLAGS:
- Non-independent Chair & Interim CEO during transition; although the Board instituted a strong Lead Independent Director structure, combined roles can weaken perceived independence. Policy contemplates an independent Chair following the next permanent CEO transition absent a Board exception.
- Tax gross-up for commuting-related aircraft use as Interim CEO—shareholder-unfriendly feature; contrasts with company’s stated practice of no CIC tax gross-ups.
- Overboarding waiver: While analyzed and granted, continuing service on two outside public boards during Interim CEO duties can raise time-commitment concerns.
- Shareholder sensitivity: Prior low say-on-pay support noted (22% rejection in 2023) and ongoing shareholder proposal activity on executive stock retention—signals heightened investor scrutiny of compensation and governance.
Related-party transactions: NCGPP Committee oversees and must approve material related person transactions (threshold increased to $120,000 in 2024); no specific related-party transactions disclosed for Mr. Shafer.
Compliance:
- Section 16(a) filings: Company believes all required insider ownership reports were timely during/with respect to 2024.