Joel Grade

About Joel Grade

Joel Grade, 53, is Executive Vice President and Chief Financial Officer of Baxter International (BAX), appointed effective October 18, 2023, after a 25-year career at Sysco and prior experience at EY; he holds a BBA in accounting/finance from the University of Wisconsin and an MBA from Northwestern Kellogg . During 2024, Baxter’s continuing-operations performance included global net sales of $10.6B (+3% YoY), adjusted EPS of $1.89 (+11% YoY), operating cash flow of $819M and free cash flow of $373M, with company TSR of approximately -63% over 3 years and -61% over 5 years, contextualizing pay-for-performance and capital allocation decisions under his CFO tenure . Grade publicly emphasized deleveraging and capital discipline, including a 2025 dividend reset expected to free >$300M/year for debt reduction .

Past Roles

Organization	Role	Years	Strategic impact
Sysco Corporation	EVP Corporate Development	Dec 2020–2023	Led corporate development at global foodservice leader; prior roles spanned finance and operations
Sysco Corporation	EVP & CFO	2015–Dec 2020	Enterprise CFO with deep operational and finance oversight
Sysco Corporation	SVP Finance & Chief Accounting Officer; SVP Foodservice Operations	Various (pre-2015)	Senior finance leadership and operating roles across business units
Ernst & Young LLP	Senior Auditor	Early career	Public accounting and audit foundation

External Roles

None disclosed in Baxter filings or press materials reviewed .

Fixed Compensation

Year	Base Salary ($)	Target Bonus (% of Salary)	Actual Annual Incentive Paid ($)
2024	812,000	100%	839,608
2023 (partial year)	164,384	Prorated eligibility	167,671

Additional cash: $500,000 sign-on bonus (paid after 90 days; subject to 100% repayment if departure within 12 months or 50% within 12–24 months, except qualifying involuntary termination under Executive Severance Plan) .

Performance Compensation

Element	Metric	Weighting	2024 Target	2024 Actual	Formulaic Payout	Notes/Vesting
Annual Incentive	Adjusted Net Sales Including Discontinued Operations (Company)	50%	$15,017M	$15,181M	122%	Company-wide for CEO/CFO
Annual Incentive	Further Adjusted EPS Including Discontinued Operations	25%	$2.95	$2.79	86%	Company-wide
Annual Incentive	Adjusted Free Cash Flow Including Discontinued Operations	25%	$700M	$501M	53%	Company-wide
Annual Incentive (Aggregate)	Weighted financial result	—	—	—	96%	CHC adjusted to 94% for CEO/CFO alignment; Grade individual modifier 110% → total payout 103% of target
PSUs (2024–2026 cycle)	Relative TSR vs S&P 500 Healthcare Equipment & Services Index	100% for PSU tranche	Target = 50th percentile	In progress (performance period)	Payout 0–200% linear (cap at 100% if negative TSR)	Three-year vest post certification in early 2027
RSUs (2024 grant)	Time-based	—	33-1/3% per year	March 2025, 2026, 2027 tranches	—	Standard three-year ratable vest

Individual performance assessment categories and initial outcomes (rolled to 100% before individual modifiers): Patient Safety & Quality 103%; Best Place to Work 100%; Growth Through Innovation 105% .

Equity Ownership & Alignment

Item	Detail
Beneficial ownership (as of Feb 27, 2025)	93,096 common shares; 34,091 exercisable options
Stock ownership guideline	4× base salary within 5 years; executives on track to meet requirements
Hedging/pledging	Prohibited (no shorting, derivatives, margin, or pledging) under Baxter Securities Trading Policy
2024 RSU vesting schedule (Grade)	Mar 2025: 14,289; Dec 2025: 17,725; Mar 2026: 14,289; Dec 2026: 17,727; Mar 2027: 14,289 (excl. DEUs)
Options outstanding (Dec 31, 2024)	12/1/2023 grant: 34,091 exercisable; 68,182 unexercisable; $36.55 strike; expires 12/1/2033
Option ITM status at year-end 2024	Baxter close $29.16; 12/1/2023 options at $36.55 were out of the money
2024 vesting/realization	Shares acquired on vesting (RSU/PSU): 18,276; no option exercises

LTI mix: 2024 annual LTI target $3.6M split 50% PSUs and 50% RSUs for CFO; grant date March 6, 2024 with 42,867 PSUs and 42,867 RSUs (target counts; RSUs calculated by average price method) . New-hire off-cycle equity: $3.6M (50% PSUs/25% RSUs/25% options) and $1.0M RSUs, each vesting one-third annually from first off-cycle grant date; PSU performance period Jan 1, 2023–Dec 31, 2025 for new-hire PSU tranche .

Employment Terms

Role start date: October 18, 2023; based at Deerfield, IL; at-will employment .
Executive Severance Plan (U.S.-based executives including Grade): upon involuntary termination without cause: cash severance equal to 1.5× (base salary + target bonus), prorated annual incentive (if termination Feb 1 or later) based on actual company performance and target individual performance, lump-sum equivalent of 18 months employer benefits costs (if enrolled), and up to $35,000 outplacement; subject to release and clawback if post-termination violations or cause identified within 12 months .
Change-in-Control (CIC) Agreement: double-trigger; upon qualifying termination within 24 months post-CIC, cash severance 1.5× (base + target bonus), prorated annual incentive at target, continued health/welfare coverage (18 months), up to $35,000 outplacement; no excise tax gross-ups; subject to non-compete and non-solicit covenants for 18 months, plus perpetual non-disparagement .
Clawbacks: Mandatory Clawback (Dodd-Frank/NYSE) for erroneously awarded incentive pay to current/former executive officers upon restatements; broader Compensation Recoupment Policy applies to incentive plans and LTI grants, including forfeiture/cancellation/repayment for restrictive covenant violations; separate LTI non-compete clawback cancels unvested awards and recoups gains from awards vested within 12 months prior to termination if violated .
Ownership guidelines: 4× salary for executives; five-year compliance window; unvested PSUs and options excluded from count .
Perquisites: eligible for executive physical; limited perqs; anti-hedging/anti-pledging enforced .

Potential payments illustration (as of 12/31/2024): Qualifying termination following a CIC total $8.44M; components include severance $2.436M, prorated annual incentive $812k, health/welfare $35k, accelerated equity vesting/payout value $5.122M, outplacement $35k .

Compensation Structure Notes

Fixed vs variable: 2024 CFO compensation heavily variable via annual incentive and LTI; CFO annual LTI targeted at $3.6M; for 2024, Baxter set most executives’ annual LTI as 100% RSUs except CEO/CFO at 50% PSUs/50% RSUs given enterprise leadership roles .
Annual incentive structure: weights of 50% Adjusted Net Sales Including Discontinued Operations, 25% Further Adjusted EPS Including Discontinued Operations, 25% Adjusted Free Cash Flow Including Discontinued Operations; individual performance modifier range 0%–125% with corporate responsibility goals embedded; Grade’s final payout was 103% of target after alignment and individual modifier .
2025 program changes: Company returning to 2023 LTI mix (50% PSUs/25% options/25% RSUs) post Kidney Care separation; Free Cash Flow performance curve reverted to threshold 80% and max 120%; individual modifier categories updated to Patient Safety & Quality and Growth (50/50) .

Performance & Track Record

2024 results: net sales $10.6B (+3%), adjusted EPS $1.89 (+11%), operating cash flow $819M (+32%), free cash flow $373M (+52%) from continuing operations . Annual incentive calculations used adjusted company metrics that included discontinued operations for plan funding .
Margin framework under Grade: bridge from ~13.9% 2024 adjusted operating margin to ~16.5% 2025 includes ~40bps Helene normalization, ~220bps stranded cost offset, ~100bps operational improvements (pricing, mix, volume), offset by ~40bps remaining stranded costs and ~60bps low-margin MSA dilution .
Capital allocation: Announced dividend reduction starting Jan 2026 to free >$300M annually for deleveraging .
Investor communications: Provided segment guidance and TSA/M stranded cost plans; emphasized continuous improvement and segment operational momentum .

SAY-ON-PAY & Shareholder Feedback

Say-on-pay approval ~80% for 2023 compensation at 2024 annual meeting; disclosure enhanced in response to shareholder outreach; rigorous stock ownership and clawback policies maintained .

Equity Grants Detail (2024)

Grant	Grant Date	Type	Target #/Value	Vesting
Annual LTI (CFO)	3/6/2024	PSUs (Relative TSR)	42,867 target shares	3-year performance (01/01/2024–12/31/2026); cert early 2027
Annual LTI (CFO)	3/6/2024	RSUs	42,867 units	Ratable 33-1/3% per year (2025–2027)
New-hire off-cycle	First quarterly off-cycle post hire	PSUs/RSUs/Options	$3.6M target (50% PSUs/25% RSUs/25% options)	PSUs perf 01/01/2023–12/31/2025; RSUs/options vest 1/3 annually
New-hire off-cycle	First quarterly off-cycle post hire	RSUs	$1.0M target	Vest 1/3 annually

Investment Implications

Alignment: Strong pay-for-performance design with significant at-risk LTI (PSUs tied to relative TSR) and strict ownership, anti-hedging/pledging, and clawback policies; CFO is on track to meet 4× salary ownership requirement in five years .
Retention risk: Multiple unvested RSU tranches through 2027 and PSU cycles through 2026–2027 support retention; severance and CIC protections are market-standard and double-trigger, without excise tax gross-ups .
Insider selling pressure: No 2024 option exercises; upcoming RSU vest dates (Mar/Dec 2025, Mar/Dec 2026, Mar 2027) represent potential incremental supply but are offset by ownership guidelines; 12/1/2023 options were out-of-the-money at 12/31/2024 ($29.16 vs $36.55 strike), limiting near-term exercise incentives .
Trading signals: Dividend reset to accelerate deleveraging (> $300M/year) and 2025 margin uplift plan (to ~16.5%) suggest improvement in FCF and profitability trajectory under Grade’s financial stewardship; execution against stranded cost offsets and segment mix is a key catalyst to monitor .

Citations: All data sourced from Baxter’s 2025 DEF 14A, 8-K filings, press releases, and earnings call transcripts as referenced in brackets.