Baxter (NYSE:BAX) announced three new executives as part of a leadership reshuffle as it moves forward with a cost-cutting restructuring plan.
Last month, Baxter announced plans to spin off its renal care and acute therapies units. That includes a restructuring plan that saw layoffs of up to 5% of the company’s global workforce last week.
In connection with its new operating model, the company yesterday announced three new presidents for its vertically integrated global business units. Baxter intends to make each appointment effective on March 1, 2023.
The company appointed Heather Knight as EVP and group president for medical products and therapies. She originally joined the company from Medtronic in 2019. Knight just last week resigned from Titan Medical’s board. The surgical robot maker has its own cost-cutting efforts in progress.
Baxter also named Reaz Rasul as EVP and group president for healthcare systems and technologies. Rasul served as president of front-line care, having joined the company in 2017.
It appointed Alok Sonig as EVP and group president for pharmaceuticals. Sonig joined Baxter from Lupin, Inc. last year.
The company said SVP and President of EMEA, Cristiano Franzi, will serve as interim head of its kidney care global business unit. A search for a new president of that business remains underway, Baxter said. Franzi is set to continue leading the EMEA operations during the search.
Baxter plans to complete the design of its new operating model by early in the second quarter of 2023. It expects to implement an updated reporting framework in the second half of the year.
Baxter’s board of directors gets a revamp
In addition to its executive changes, Baxter’s board of directors is set for a new look, too.
Thomas Chen notified the company of his decision to retire from the board, effective April 28, 2023. Baxter expects Cathy Smith to become chair of the board’s nominating, corporate governance & public policy committee immediately after Chen’s retirement.
Baxter also decided not to nominate Albert Stroucken for reelection to the board at its 2023 annual stockholder meeting. This falls in accordance with the mandatory retirement age set forth in the company’s governance guidelines. Stroucken’s term expires on April 28, 2023. Baxter plans for Peter Wilver to serve on and become chair of the board’s audit committee following Stroucken’s departure.
Following the departure of Chen and Stroucken, Baxter’s director headcount automatically decreases from 12 to 10.
The board also appointed D. Brent Shafer as its lead independent director. Shafer served on the board, audit committee and compensation committee since May 2022.
Baxter also announced a cap on cash severance payouts for executives. The company prohibited cash severance payments that exceed three times the total of an executive’s salary and target annual bonus opportunity without shareholder approval.