will now come to order for the 2021 Annual Meeting of Stockholders for Baxter International. My name is Joe Almeida, and I'm Chief Executive Officer and Chairman of the Board of Baxter International. I'm pleased to welcome you to our 2021 Annual Meeting. For the 2nd time, we are conducting today's meeting via webcast. If you are experiencing any technical issues please contact Broadridge representative at 800-586-1548 for those in the United States or +1-three zero three five six two nine two eight 8 for those outside the United States.
Each of you should have received an agenda for the meeting, which indicates the matters to be considered today. At the conclusion of the meeting and time permitting, we will address duly submitted general questions. I now would like to introduce Jay Saccaro, Baxter's Chief Financial Officer and Alan Bradford, Corporate Secretary. At this time, I would like to introduce the members of our Board, all of whom are participating on the webcast. Our Lead Director was recently appointed to this role in February.
Al is a Albert P. Ellischokan is critical piece is a critical piece of a strong corporate governance practices we have at Baxter, one which Thomas Stahlkamp, our former Lead Director, helped to augment and oversee. Then we have Thomas Chan, John Forsyth, Peter Hellman, Mike Mahoney, Perry Morrison, Doctor. Steve Osterly, Kathy Smith, Thomas Stahlkamp, Amy Wendel and Doctor. David Wilkes, our newly appointed Director.
We are extremely fortunate to have a Board with distinguished backgrounds and extensive leadership experience. I encourage you to read their biographies in our 2020 proxy statement. I would like also to thank Doctor. James Gavin, who recently retired from the Board for his 18 years of service to Baxter. Over the course of his tenure, he helped to oversee the transformation of the company and the implementation of best in class corporate governance practices, including improved board refreshment practices and the expansion of our corporate governance outreach programs.
Baxter's talented senior leadership team is also on the call with us today. Before we move on to today's business, I will ask Ellen to provide our Safe Harbor statement.
Thank you, Joe. Our comments today will include forward looking statements that involve risks and uncertainties. Actual results may differ materially from the forward looking statements. Please refer to our annual report on 2020 Form 10 ks and our other filings with the Securities and Exchange Commission, all of which are available on our website. In addition, today's presentation contains certain non GAAP financial measures.
A reconciliation of these measures to the most directly comparable GAAP financial measures is posted on the Investor Relations section of our website.
Thank you, Alan. Copies of our proxy statement were sent to stockholders of record on or about March 22, 20 21. The record date for the voting of shares was March 11, 2021. Alan, please report the number of shares of common stock that are entitled to vote and are present at this meeting.
More than 87% of the approximately 506,000,000 shares entitled to vote at this meeting are represented here today. There are no other securities entitled to vote. Therefore, a quorum is present.
Thank you. Since a quorum is present, we will proceed with today's business. Peter Seblich with Broadridge Financial Solutions will act as Inspector of Elections today. His oath of office has been filed with the Corporate Secretary. John Czysiak and Johnny Lewis of PricewaterhouseCoopers LLP Bachelor's Independent Registered Public Accounting Firm are with us today.
Mr. Cyshack assumed the role of our new lead partner beginning with the 2021 calendar year. He has advised me that they have no formal statement to make, however, they will be available during the Q and A session to respond to related questions from stockholders. Before we begin with the formal business of the meeting, I'd like to review the procedures that will follow during the meeting today. We have 7 items of business to be voted on today.
After the presentation of each agenda item, I will ask Ellen to raise any questions related to what to that item that have been duly submitted through the Broadridge portal. To submit a question, please click on the Ask a Question button on the meeting website. You will then need to submit your question In order to ensure that the business of the meeting proceeds in an orderly fashion, questions at this point should be limited to the 7 agenda items being considered today. We will be posting answers to a representative set of questions relating to the meeting matters that remain unanswered after the completion of today's meeting, as soon as reasonably practicable. Answers will be posted at www.investor.baxter.com and will remain available until 1 week after posting.
Following the voting on matters to be acted upon the meeting, rather be acted upon at the meeting, I will share certain highlights of Baxia's 2020 performance and direction for the future. Time permitting, we will return we would then turn to general Q and A. We'll now proceed with the formal business of the meeting. There are 7 proposals on today's agenda. First, the election of 12 directors 2nd, approval of named executive officer compensation for 2020 3rd, the ratification of PwC as Baxter's independent public accounting firm for 2021 4th, the vote to approve Baxter's 2021 incentive plan also referred to as Omnibus Plan 5th, the vote to approve the amendment of and restatement of Baxter's employee stock purchase plan also referred to as the ESPP amendment and 6th and 7th, 2 stockholder proposals.
Most of our stockholders have already voted on all of these proposals. If you have previously voted, you do not need to take on any action unless you wish to change your vote. To submit or change your vote during the meeting, you must be logged on as a Baxter stockholder. If you are, click on vote here on the meeting website. Submission of a new vote will revoke any prior proxy you may have previously submitted.
I will now proceed through the proposals in order in which they were discussed in the proxy statement. Time permitting, I will ask Alan to present any duly submitted questions relating to a particular proposal after the proposal has been presented. The first proposal to be considered is the election of 12 directors. May I have the nominations for directors?
Good morning, Mr. Chairman. My name is Eric Zain and I'm a Baxter stockholder. I nominate Joe Almeida, Thomas Chen, John Forsyth, Peter Hellman, Mike Mahoney, Patty Morrison, Steve Osterly, Kathy Smith, Al Struken, Tom Stahlkamp, Amy Wendel and David Wilkes for Election as Directors.
Thank you. Is there a second?
My name is Ramon Rivera, and I am also a Baxter stockholder. I second.
Thank you. For this annual meeting, Baxter's bylaws require that the Corporate Secretary be notified in writing of any nominations for Director on a timely basis in advance of today's meeting. We have not received notice of any other nominations for Directors. Accordingly, the nominations for directors are closed. The Board of Directors has recommended a vote in favor of each of these directors.
Ellen, have there been any duly submitted questions on this proposal?
There are no relevant questions that we won't be addressing on our website.
The second proposal to be considered by stockholders is an advisory vote on the compensation of the company's named executive officers for 2020. Is there a motion?
My name is Eric Zain and I'm a Baxter stockholder. I so move.
Thank you. Is there a second?
My name is Ramon Rivera. I am a Baxter stockholder. I second.
Thank you. The Board of Directors has recommended a vote in favor of this proposal. Ellen, are there any duly submitted questions on this proposal?
There are no relevant questions that we won't be addressing on our website.
The 3rd proposal to be considered is the ratification of PricewaterhouseCoopers as Bachelor's independent registered public accounting firm for 2021. Is there a motion?
My name is Eric Zain. I'm a Baxter stockholder. I so move.
Thank you. Is there a second?
My name is Ramon Rivera. I am a Baxter stockholder. I second you.
Alan, have there been any duly submitted questions on this proposal?
There are no relevant questions that we won't be addressing on our website.
The 4th proposal to be considered is the approval of Baxter's 2021 incentive plan. Is there a motion?
My name is Eric Zian. I'm a Baxter stockholder. I so move. Thank you.
Is there a second?
My name is Ramon Rivera. I am a Baxter stockholder and I second.
Ellen, have there been any duly submitted questions on this proposal?
There are no relevant questions.
The 5th proposal to be considered is the approval of Baxter's employee stock purchase plan amendment. Is there a motion?
My name is Eric Zian. I'm a Baxter stockholder. I so move.
Thank you. Is there a second?
My name is Ramon Rivera. I am a Baxter stockholder and I second.
Alan, have there been any duly submitted questions on this proposal?
There are no relevant questions.
The 6th proposal to be considered was submitted by Mr. Chevedden. This proposal relates to giving stockholders the ability to act by written consent and appears as Proposal 6 in the proxy statement. Mr. Chevedden, would you like to make a motion with respect to Proposal 6?
I'd ask that in consideration for the others present in our agenda, please keep your comments to a reasonable period of time. The operator is now unmuting your line.
Hello. This is John Chevedden. Can you hear me okay?
Yes, we can.
Proposal 6, shareholder write deck by written consent. Shareholders request our Board of Directors take the necessary steps to permit written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting at which all shareholders entitled to vote thereon were present in voting. Written consent is a super democratic process for between annual meetings. Written consent is super democratic because if a shareholder does not support written consent topic, the shareholder does not have to do anything and it counts against the vote. This is in contrast to a shareholder meeting where shareholder support or shareholder opposition counts for nothing unless the shareholder makes the effort to vote.
A shareholder right to act by written consent affords Baxter Management strong protection. Due to the low shareholder participation in annual meeting elections, any action taken by written consent would still need more than 63% approval from the shares that normally cast ballots at the annual meeting. This 63% vote requirement gives substantial protection to management that will remain unchanged. This proposal topic won more than 38% support at our 2020 shareholder meeting. This 38% support may have represented a near majority vote from the shares that have access to objective proxy voting advice.
As a sign of management desperation in 2020, management conjured up haphazard versions of written consent not envisioned by the 2020 shareholder proposal and then attacked its own made up haphazard version of written consent. Management failed to provide even one example of its fictionalized haphazard version of written consent that was ever adopted during the last several decades. Management promotes the fallacy that shareholders should be distracted from improving corporate governance restricted to only one formal means, the calling for be restricted to only one formal means, the calling for a special shareholder meeting to raise an issue between annual meetings. Plus, it takes almost 1 third of the shares that voted annual meetings in order to call for a special shareholder meeting. Management bragged about the constructive deliberation at a special shareholder meeting.
This has been completely blown out of the water by the onslaught of tightly controlled online shareholder meetings. Management proposed a fallacy that shareholders should be comatose about approving their corporate governance since management has an informal shareholder engagement process that has no rules, no independent oversight, and can be abruptly shut down. It is amazing the number of companies that brag about how their so called shareholder engagement process gives results that are in lockstep with the management sales pitches. Please vote yes. Show the right deck by written consent proposal 6.
Thank you. Is there a second? I second. Ellen, have there been any duly submitted questions on this proposal?
There have been no relevant questions submitted.
The 7th proposal to be considered was submitted by Mr. Kenneth Steiner. Mr. Steiner has designated Mr. Chevedden as his proxy on this proposal.
This proposal relates to separating the roles of Chairman and CEO and appears as Proposal 7 in the proxy statement.
Hello. This is John Chevedden. Can you hear me okay?
Thank you, Mr. Chevedden, for acting as a proxy for Mr. Steiner today. Would you like to make a motion with respect to Proposal 7? I ask that in consideration for the others present in our agenda, please keep your comments to a reasonable period of time.
The operator is now unmuting your line.
Hello. This is John Chiavedi. Can you hear me okay?
Yes, we can, Mr. Chiavedi.
Proposal 7, independent board chair, sponsored by Kenneth Steiner. Cheryl's request the Board of Directors adopt a policy to require the chair of the Board of Directors whenever possible to be an independent member of the board. If you voted against this proposal, please consider changing your vote before the polls close in a few minutes. It is shameful that this proposal has to be on the ballot today because it received 54% approval at our 2020 annual meeting. Proposals that receive a majority shareholder support are expected to be adopted.
The lame response to management was a fickling policy that is meaningless. Management tried and failed to convince the Securities and Exchange Commission that it had adopted a meaningful policy in response to the 2020 shareholder proposal that won our 54% support. An internal lead director policy is no substitute for the independent board chairman that we voted for in 2020. A lead director is an empty suit compared to the independent board chairman we voted for. Doctor.
James Gavin chaired the governance committee, which is responsible for the Baxter Fig Leaf policy that would allow easy the Fig Leaf policy that would allow easy avoidance of an independent board chairman for a decade or longer. Doctor. Gavin is now leaving the board and he's going out with vutzpah, trying to sell Baxter shareholders on an argument that ran out of gas at the Securities and Exchange Commission. The Securities and Exchange Commission is an expert on corporate governance. The SEC studied the Baxter Lee director policy and found it lacking compared to our 2020 shareholder approval of an independent board chairman.
The SEC issued a formal decision. The fake belief policy championed by Doctor. Gavin could be called the eternal lead director policy for Baxter. This fake belief policy gives the Baxter board an excuse that is good for 100% of the time to easily avoid Baxter ever having an independent board chairman that we voted for in 2020. Please vote yes, independent board chair proposal 7.
Thank you. Is there a second?
My name is Helen Fonin. I'm a Bank of Stockholder. I second.
Ellen, have there been any duly questions submitted on this proposal?
No relevant questions have been submitted.
We now proceed to vote on the agenda items. The time is now 918, and I declare the Thank you. The time is now 9/19, and I declare the polls closed. At the end of the meeting, we will present the results based on the votes submitted as of this morning. The Inspector of Elections will tabulate the votes and will disclose the final results on the Form 8 ks to be filed within 4 business days after completion of this meeting.
Dear stockholders of Baxter, I want to spend a few minutes with you today speaking about our journey in 2020 and the 2021 and forward plans for the company. What is at the center of everything we do is our patients. Our mission is save and sustain lives. That is demonstrated by 50,000 employees that serve more than 75,000,000 patients in more than 100 countries. Baxter registered sales in 2020 of $11,700,000,000 split in 3 different regions of the world with Americas at 54 percent Europe, Middle East and Africa 25% and Asia Pacific 21%.
We have a large scope of products within Baxter. They range from renal care with $3,800,000,000 in sales, from medication delivery with $2,700,000,000 in sales, Pharmaceuticals $2,100,000,000 in sales and many other products, including our biopharma solution business around $500,000,000 in sales and this is the business that helped fill and finish vaccines against COVID-nineteen. 2020 was a very difficult year for the world and was not different for Baxter, but Baxter employees stepped up to the plate. They showed what the mission is about. They showed what they are about.
We maximize the production of medically necessary products across all of our facilities, which never shut down for a minute during the pandemic, mainly facilities that were located in hotspots across the globe, such as U. S. And Italy and parts of Central America. We delivered products to hotspots. We prioritized products for places in the world that needed the most.
We partnered to manufacture products in vaccines primarily with 3 different companies and we're currently making them. We always said the patient safety and quality is number one priority for the company as well as our employees took several precautions to make sure that our facilities were safe, even being located, some of them in hotspots. We also donated $2,500,000 to Global Relief Partners for the pandemic. Our performance, despite the fact that we had significant impact of COVID-nineteen in 2020 results, we still registered 2% of operational growth. We had costs of COVID that were headwinds for the company, including costs of PPE, COVID pay, inventory build, logistic costs and many other things that came to bear.
We reduced our profitability by 70 basis points to 18% and that also was reflected in our earnings per share adjusted earnings per share that went down 7% to $3.09 and affect our cash flow as all these items are cash driven. We had a 2 $53,000,000 reduction in cash flow to $1,200,000,000 But nevertheless, there's no one thing we did that me as a CEO would ever regret. The commitment of our employees made possible that we served millions of patients across several different hotspots, making sure that our mission was always first. It's worthwhile for you to walk with me what we call Baxter Force Multiplier. At the center of everything is our mission, but how do we get there?
We have 3 aspirations. First is number 1, patient safety and quality and employee safety. 2nd is growth through innovation. Then best place to work, we do those things right. We do with ethics and compliance and honesty, transparency in everything we do.
We act with sense of urgency. We collaborate with courage and simplicity. We do those things right. We get to the mission of the company, which is save and sustain lives. By doing that, consequently, we're going to hit 2 vectors of performance.
1 is financial performance to satisfy our stockholders. 2nd is our net promoter score, which measures our engagement with our patients and customers. Do those things right, we're right back at our mission. Let's take a double click quality as a top priority for the company. We had significant improvements from 2015 to today.
You can read on the screen some of the improvements, but I want to highlight the reduction in medical device the reduction in medical device reports, which we call MDRs of 76%, field alert reports of 82% and field actions of 48%. We had 6 warning letters that were resolved since 2014 and we have one sole warning letter outstanding in our plant on Ahmedabad, India that came with the acquisition of Claris. We're working very hard to satisfy that and we hope to get to that resolution in the future. Patient safety and quality drives what we do every day. It's also important to us to be recognized for best place to work.
We won every day in every part of the world we do business, our employees wake up in the morning and feel proud that they come to work for a company that makes a difference in people's lives. We have 4 tenets of our best place to work, serving our communities worldwide, reducing environmental footprint, expanding access to care and focusing on inclusion and diversity. And to that, we have received several recognitions across the globe as Global Citizenship and Top Employer Inclusion and Diversity, as you can see. We're very proud of it, but we're not finished. We have much to do.
We also restarted last year our activating change today, advancing racial justice within the company. We're not satisfied with where we are today. And we, as part of the society, part of the communities where we live, we have 4 areas and 4 pillars of focus. We're going to act in the workforce, workplace and culture, communities that we participate and serve in marketplace. These objectives are highlighted to our senior leadership team at Baxter, and we are very focused in advancing racial justice.
As important as everything we do is the innovation that we bring to our patients, to our customers, to the clinicians that use our products. We use 4 different vectors to that objective. We innovate in our portfolio. We develop the markets. We enter adjacencies either organic or through acquisitions.
And most importantly, now we are impacting some of our business with digital transformation. We have multiple avenues to increase patient impact. We're hitting all 4 of them. As an example, I can tell you in 2021, we're launching 22 products. In 2020, Some of the recent highlight products that were launched included several EUAs in the U.
S. And outside the U. S. For products that were needed during COVID. One of them is Oxiris, which was approved for use in the U.
S. To filter cytokines for patients who are the most affected by COVID-nineteen. We also launched our Home Choice Clara APD, very important cost effective product into the U. S. For the first time after 20 years, we launched a new in center hemodialysis monitor AK98.
We also have created a new pump platform, which currently is with the FDA for approval, but we already got approval in Canada as well as in the EU with CE Mark. And lastly, we had multiple strategic acquisitions to advance our portfolio and grow our business. We're committed to innovation. Innovation fuels our mission. When we do that, we also need to look at our structure, our cost structure across the company.
Operational efficiency is everything to us. We have done a significant job in reduced our cost structure, but we still need to be very focused in reallocating resources into innovation, optimizing our integrated supply chain across the globe by continued financial discipline, while financing digital transformation. So we have a lot of things going on as the company continues to advance its modernization and its culture transformation. To do that, we allocate our capital as we think are the most appropriate way to benefit our shareholders. We reinvest in the business with capital investment in all of our facilities across the globe.
We meaningfully invest also in research and development. We just increased our dividends by 14 percent and just repurchased $300,000,000 of our shares. But we are also very committed to M and A, not only tuck in, but understanding where is the puck going? Where is all the transformation that we experienced during the pandemic, COVID-nineteen? The digital transformation in the world is bringing new horizons to Baxter.
So when we look at M and A, we look at at tuck in acquisitions, but also we always keep looking at where the puck is going, nowhere it is today. To that end, since 2015, we have delivered higher returns than the S and P 500 and S and P Healthcare. We did have a year last year that affected our performance because COVID-nineteen. But when we look at the performance of the company, I can assure you we did everything we could to take the best result while serving our patients across the globe. But you can see the performance of the company has exceeded its benchmarks.
So what is in store for 2020 on and beyond? Seven priorities, always patient safety and quality. Number 1 in our heads, grow through innovation to 2 vectors, innovative ecosystem, because it takes more than 1 group in a company to make this happen. It takes a whole company as well as the outside in mentality. Digital transformation in digital health to bring our new products to market, such as our new share source platform revamped with mobile app that is coming out later this year.
Best Place to Work with 2 very solid pillars, culture and talent and our activating change today for social justice. And industry leading performance, because we still need to do a lot of work in our margins, so we'll continue to drive margin improvement and transformation of the portfolio, meaning over investing in areas that have higher potential for growth. So when we look at the momentum that we have today, we're ensuring that we are agile enough to compete in the new world. We're seeing where the puck is going. We're seeing where the trends are going and trying to get ahead of them.
Advancing the digital transformation, the company makes this company outstanding and makes this company stand above and beyond our competitors. We are maintaining strong cadence of new product launches, as I just said, 22 new products in 2021. And we are strategically deploying capital to the right places. On behalf of Baxter, I'm here thanking the 50,000 employees that made this company so successful in serving our patients and customers in 2020. It's a lot in store in the future.
We're not done yet. We have a lot of work ahead of us and appreciate our shareholder support of Baxter now and in the future. Moving on to the next order of business, Alan, do you have the results of the voting?
Based on the results submitted as of this morning, the advisory vote requesting that stockholders approve the compensation of the company's named executive officers as disclosed in the proxy statement, receive votes in favor representing approximately 91% of the shares present and entitled to vote. Assuming any new or changed votes duly submitted during this meeting do not change the results, the disclosed compensation for 2020 has been approved and the company thanks you for your support. Based on the results submitted as of this morning, the proposal to ratify PwC as the company's independent registered public accounting firm in 2021 received votes in favor of approval, representing approximately 90 2% of the shares present and entitled to vote. Assuming any new or changed votes duly submitted during the meeting do not change the results, the appointment of PWC for 2021 has been ratified. Based on the results submitted as of this morning, the vote requesting that stockholders approve the company's new 2021 incentive plan as disclosed in the proxy statement received votes in favor representing approximately 94% of the shares present and entitled to vote.
Assuming any new or changed votes duly submitted during the meeting do not change the results, the 2021 incentive plan has been approved and the company thanks you for your support. Based on the results submitted as of this morning, the vote requesting that the stockholders approve the company's amended and restated employee stock purchase plan and disclosed in the proxy statement receive votes in favor representing approximately 99% of the shares present and entitled to vote. Assuming any new or changed votes duly submitted during the meeting do not change the results, the amended and restated ESPP plan has been approved and the company thanks you for your support. Based on the results submitted as of this morning, the proposal relating to granting stockholders the ability to act by written consent, receive votes in favor of approval, representing approximately 53% of the shares present and entitled to vote. Assuming any new or changed votes duly submitted during this meeting do not change the results the proposal has passed.
Now on behalf of Al Strueken, our new Lead Independent Director Thomas Chen, the new Chair of our Nominating Corporate Governance and Public Policy Committee and the rest of the Baxter Board, I want to thank shareholders for expressing their views on this matter and to many shareholders for engaging with us on this important topic over the prior weeks months. The board is committed to addressing this matter in the off season, and we will revert in the coming months with our plans on how to address the shareholder proposal, which has clearly received majority support. Now based on the results as of this morning, the proposal relating to separating the roles of Chairman and CEO received votes in favor of approval representing approximately 27% of the shares present entitled to vote. Assuming any new or changed votes newly submitted during this meeting do not change the results, this proposal has not passed.
Thank you, Alan. This completes the business of the meeting. Time permitting, I would ask that Alan present any general questions not otherwise relating to one of the meeting agenda items. As a reminder, we will be posting answers to a representative set of unanswered questions relating to the meeting matters as soon as reasonably practicable after completion of the meeting. Answers will be posted at www.investor.beckster.com and will remain available until 1 week after posting.
There's a meeting matters that we won't be addressing on our website, Joe.
Thank you, Alan. I now declare this meeting formally adjourned. Thank you for participating in this year's Annual Meeting. We appreciate your continuing support.