Baxter CEO's compensation sinks 16.4 percent

NEW YORK -- Baxter International Inc. Chairman, President and Chief Executive Robert L. Parkinson Jr.'s compensation in 2008 fell 16.4 percent to $13.9 million, according to a Securities and Exchange Commission filing Wednesday.

The Deerfield-based diversified health care products maker said Parkinson received a salary of just over $1.3 million, or 3.3 percent higher than the prior year. But, the performance bonus fell 9.7 percent to just over $2.7 million. Other compensation, which includes mostly dividend payments, accounted for $212,326.

The majority of his compensation came from stock and option awards that are now "underwater," or worth less than on the day they were granted because of falling stock prices. Parkinson's stock options and restricted stock totaled just under $9.7 million, down 21 percent from $12.2 million in 2007. But, the shares were granted at $58.12 apiece in March of 2008 and the company's stock is now trading around $50.

Shares slipped 7.6 percent in 2008 to close at $53.59 as broader markets tumbled. But the company's profit jumped 18 percent to just over $2 billion as sales rose 10 percent to $12.35 billion. The gains came from a mix of vaccines, treatments, and medical devices.

The Associated Press compensation calculation is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.