Win some, lose some…

August 19, 2004

As regular readers of footnoted.org know, even top executives who screw up or resign under some sort of cloud, usually still walk away with generous severance agreements, lavish perks, and consulting contracts. But that’s not the way things worked out for former Baxter (BAX) Chairman and CEO Harry Kraemer, Jr. who stepped down in April, but didn’t leave the company until the end of June. In recent years, the company has lost credibility with investors for missing earnings estimates and in late July, it announced that it was restating its results for the past three years. Kramer, 49, had been CEO since 1999 and Chairman since 2000. His separation agreement, included in the Q Baxter filed last week, paid him $4.16 million in severance — more than 4 times his 2003 base salary of $925,000 — and several other goodies including a $578,125 bonus, $200,000 for outplacement/legal services and $44,471 worth of unused vacation time. But unlike a lot of similar agreements, Kraemer didn’t walk away with a lavish consulting agreement or office space or the keys to the corporate jet. Indeed, other than agreeing not to compete or disparage the company for two years, Kraemer’s ties to Baxter, where he worked for 20 years, appear to be essentially severed.

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