BAXTER INTERNATIONAL INC

Pay-for-Performance and Total Target Direct Compensation Mix

Pay-for-performance is the most significant structural element of Baxter’s compensation program, where the majority of executive pay is long-term and performance-based and subject to specific performance requirements. As shown below for 2025, 92% of Mr. Hider’s total target direct compensation and 81% of the average total target direct compensation for the other continuing NEOs was performance based and subject to various performance metrics and our stock price performance.

1. Percentages are calculated using annual base salary, target annual incentive and target annual LTI grant values as of December 31, 2025 for continuing NEOs.

Our Process

The CHC Committee (for NEOs other than the CEO) or the independent members of the Board (for the CEO) determines base salaries, annual incentive targets, target annual LTI grant values and overall compensation using competitive compensation data from the annual total compensation study of the compensation peer group, performed by Aon, the CHC Committee's independent compensation consultant, to inform related decision making. The CHC Committee’s evaluation incorporates informed judgment and input from the CEO, who reviews other executives’ performance and provides recommendations. In each case, the CHC Committee uses multiple reference points and applies judgment and discretion, considering not only competitive market data but also factors such as:

•company, business, and individual performance,

•scope of responsibility,

•critical needs and skill sets,

•leadership potential, and

•succession planning

The CHC Committee does not benchmark specific compensation elements or total compensation to any specific percentile relative to the peer companies or the broader market. Rather, it uses multiple reference points when establishing targeted compensation levels. The same set of factors influences the establishment of base salaries, annual incentive targets, and target annual LTI grant values, helping to ensure a consistent and comprehensive approach to executive compensation decisions.

Peer Group and Use of Peer Group Data

With input from its independent compensation consultant, Aon, the CHC Committee annually reviews the compensation peer group to determine the appropriate companies to include. In its review, the CHC Committee considers companies with all of the following factors for objectivity:

•Publicly-traded, US-based companies, with a focus on healthcare equipment, services and supplies and life sciences tools and services indices.

•Revenues and market capitalization within a reasonable range of Baxter’s revenue and market capitalization.

•List us as a peer, are in our peer group as selected by a proxy advisory firm or are prevalent peers of our peer group selected by a proxy advisory firm.

The CHC Committee also evaluates the compensation programs of other companies which, while not in the peer set, have similar characteristics of Baxter’s business model, complexity and sophistication.

Based on this review, the CHC Committee determined that the existing companies represent a reasonable group of comparators from a market competitiveness and financial stakeholder perspective and thus no changes were made for the 2025 compensation peer group.

For 2025, the compensation peer group is as follows:

What Baxter Does

Emphasize company performance. 92% of the CEO’s 2025 total target direct compensation and an average of 81% of the other continuing NEOs’ 2025 total target direct compensation is based on our financial performance.

Align with stockholders. 80% of the CEO’s 2025 total target direct compensation and an average of 64% of the other continuing NEOs’ 2025 total target direct compensation is based on long-term incentives aligned with stockholders’ interests.

Incorporate corporate responsibility metrics into the annual incentive plan. NEOs have shared corporate responsibility goals embedded into their 2025 annual incentive individual performance assessment measured, for 2025, under two categories: (i) People (50%) and (ii) Quality (50%).

Require significant stock ownership. Executive officers are subject to certain stock ownership requirements and neither unvested PSUs nor unexercised stock options (or any portions thereof) count towards the requirements.

Maintain anti-hedging and anti-pledging stock policies for executives and directors. These policies reflect good governance and mitigate compensation-related risk.

Allow for clawbacks and forfeitures under the annual incentive and long-term incentives based on the Mandatory Clawback Policy and Compensation Recoupment Policy (including without limitation all time-based incentive awards). Our Mandatory Clawback Policy is consistent with Dodd-Frank requirements and corresponding NYSE listing standards and our Compensation Recoupment Policy extends beyond the applicable Dodd-Frank requirements. Various actions can be taken under the two policies (or are required to be taken, as applicable) with regard to annual and long-term incentive payouts to executives and other incentive-based compensation upon a financial restatement or for an employee’s violation of restrictive covenants.

Pay severance and vest outstanding equity grants only upon a “double trigger” in the event of a change in control. The “double trigger” requires both a change in control and termination of employment by the company without cause or by the executive for good reason.

What Baxter Does Not Do

Provide tax gross-ups in the event of a change in control. Taxes in the event of a change in control are each NEO’s sole responsibility.

Re-price or exchange of underwater stock options. We do not re-price outstanding stock options, whether vested or unvested, without prior stockholder approval.

Pay dividend equivalent units (DEUs) on unvested RSUs or PSUs. DEUs on RSUs and PSUs in the form of additional shares are paid only upon the vesting of the underlying RSUs and PSUs with the number of DEUs for PSUs based on actual company performance.

Offer excessive perquisites. Executives are eligible for a very limited number of perquisites that generally meet criteria for efficiency, personal health and safety. In 2025, we further reduced perquisites by ending our former CEO’s personal-use aircraft allotment and terminating the related agreement.

2025 Annual Incentive Design

The 2025 annual incentive payout was calculated using the following formula:

Financial Metrics. The three applicable financial performance metrics remained unchanged from 2024 to 2025 and included Adjusted Net Sales (50% weighting), Adjusted EPS (25% weighting) and Free Cash Flow (25% weighting). Both the Adjusted Net Sales and Free Cash Flow metrics are also included in the annual incentive plans for the eligible broader employee population. We placed greater emphasis on Adjusted Net Sales (which is weighted at 50%) as compared to the other metrics to recognize the criticality of continuing organic sales growth. The weightings for Adjusted EPS and Free Cash Flow continued to be equally weighted for 2025 (at 25% each), as the two metrics remain important measures of our operational strategy used by stockholders to assess Baxter’s financial performance. For 2025, these measures are referred to as Adjusted Net Sales From Continuing Operations, Adjusted EPS From Continuing Operations and Free Cash Flow From Continuing Operations in this proxy statement. Performance goals for 2025 were established in the context of our portfolio and operating plan for the year. Following completion of the sale of our Kidney Care business, our reported financial statements reflect discontinued operations treatment. To preserve comparability between established targets and actual results, the CHC Committee evaluated performance using definitions that align with how the 2025 targets were set and communicated internally. This approach was intended to avoid windfalls or penalties solely from accounting presentation changes following the divestiture.

Individual Performance Assessment Modifier. For 2025, and after Mr. Hider's arrival in the interest of giving him the opportunity to provide his perspective, the CHC Committee selected (i) People and (ii) Quality as the two categories for the individual modifier for certain senior leaders, including the NEOs, each with an equal 50% weight. These measures reflect the consideration by the CHC Committee and Mr. Hider of the most important metrics on which to focus for 2025. The CHC Committee believes that these categories are most important to supplement senior management's annual financial goals to promote disciplined focus on a number of key measures (including manager effectiveness, engagement and regulatory actions) and drive further accountability. For more information on the two categories for the individual modifier used for 2025, see "—Elements of Executive Compensation—Determination of 2025 Annual Incentive Plan Payouts— Individual Performance".

Performance Curve. The sale of our Kidney Care business (which informed determinations for the 2024 plan year) closed in early 2025. As such, the CHC Committee approved returning to a more rigorous Free Cash Flow performance curve for 2025 given the expectation for reduced variability for this metric (now that the transaction has been completed). The curve used for 2025 performance assessment is the same that was in effect for the 2023 plan year. The Adjusted EPS and Adjusted Net Sales performance curves are aligned with that of our peers and were unchanged for 2025. For all metrics, 100% achievement would have resulted in target payout. The CHC Committee reviews these curves each year, taking into account unique circumstances when making these determinations.

Individual Performance Assessment

The CHC Committee evaluates the performance and future potential of each executive officer (other than the CEO) when determining base salary, annual incentives and long-term equity awards. Independent Board members make these decisions for the CEO. We believe compensation should reflect both company results and individual achievement against personal goals.

The CHC Committee’s evaluation incorporates informed judgment and input from the CEO, who reviews other executives’ performance and provides recommendations. Assessments consider:

•Results delivered by the executive’s area of responsibility

•Achievement of individual performance goals; and

•Potential for future contributions

Independent Board members review the CEO’s performance annually and determine any adjustments to base salary, annual incentive, and long-term equity awards. This process, supported by the independent, Non-Executive Chair of the Board and the NCGPP and CHC Committees, evaluates the CEO’s achievement of established goals and oversees the goal-setting and review process.

For 2025 financial and individual performance metric results for each NEO, see “—Elements of Executive Compensation—Determination of 2025 Annual Incentive Plan Payouts” below.

2025 Annual Equity Design

LTI grants are a significant component of each NEO’s compensation package. In 2025, 80% of the total target direct compensation provided to our current CEO and an average of 64% of the total target direct compensation provided to all other continuing NEOs was LTI-based.

The emphasis on LTI grants motivates executives to drive our long-term performance and aligns their long-term interests with those of stockholders. This alignment is furthered by requiring executive officers to satisfy the stock ownership guidelines discussed in the section below “—Additional Compensation Governance—Stock Ownership Guidelines for Executive Officers”.

In 2025, the CHC Committee approved returning to the annual equity grant mix in use for 2023, which consists of 50% PSUs, 25% stock options and 25% RSUs. A weighting of 50% for PSUs reflects our pay-for-performance philosophy.

PSU Design. In 2025 (having completed the sale of our former Kidney Care business), the CHC Committee approved returning to its prior practice of including internal financial metrics in the PSU design. Performance for the PSUs granted in 2024 is measured solely based on relative TSR versus the S&P 500 Healthcare Equipment & Services Index due to the complexity in setting three-year financial PSU targets to accurately reflect performance before and after the sale of our Kidney Care business. The 2024 and 2025 PSU design is set forth in the table below:

1. Actual payout for 2025 PSUs cannot exceed 200% of target.

2. Performance periods for 2024 PSUs and 2025 PSUs run from January 1, 2024 through December 31, 2026 and January 1, 2025 through December 31, 2027, respectively.

When dividends are paid on Baxter’s common stock, DEUs accrue on unvested PSUs during the performance period and are paid out upon vesting of such PSUs based on the number of shares actually earned.

Payout ranges for PSUs earned for Adjusted Net Sales CAGR and Adjusted ROIC are outlined below. Payout for performance between the ranges is based on linear interpolation and performance below threshold results in a 0% payout. Adjusted ROIC and Adjusted Net Sales CAGR performance goals applicable to the 2025 PSUs were set by the CHC Committee to be challenging but achievable with strong performance.

All 2025 RSUs and stock options that are part of regular annual LTI equity grants are scheduled to vest ratably over a three-year period, starting on the first anniversary of the grant date. 2025 PSUs vest after the CHC Committee certification following the completion of the applicable performance period (January 1, 2025 through December 31, 2027).

See “—Elements of Executive Compensation—Long-Term Incentive Plan—2025 Annual LTI Grants” for additional detail on Baxter’s 2025 PSU grants and see “—Elements of Executive Compensation—Long-Term Incentive Plan—2023–2025 PSU Performance” for additional detail on PSU performance, including targets and performance ranges.