Fedex investors will vote Monday
Shareholder proposals part of annual meeting
A new round of Fedex shareholder proposals is up for vote at the Memphis logistics giant’s annual shareholder meeting Monday morning.
The proposals cover executive pay, transparency on political spending, board of directors representation and other company matters. Of the eight proposals up for vote, five are from shareholders and recommended against by Fedex’s board of directors. The remaining three are backed by the board.
Any proposal not backed by Fedex’s board of directors faces an uphill battle. Fedex’s 15 largest shareowners held more than 40% of stock in fiscal 2020, per Fedex’s annual proxy statement. Directors and executive officers hold 8.49% of outstanding common stock, the majority (7.89%) owned by Chairman and CEO Fred Smith.
A minority of votes can still lead to change, however. Less than 75% of voted shares supported the compensation of Fedex’s top executives in 2019’s shareholder meeting, which Fedex said “was much lower than that of prior years.” In response, Fedex tweaked its executive compensation plan to include a new payout metric beside earnings per share.
Fedex’s annual meeting of shareholders will take place virtually at 8 a.m. CT Monday. It may be viewed online via webcast at virtual share holdermeeting.com/fdx2020. Shareholders at the close of business July 27 may vote. Details on how to cast a vote are available within Fedex’s annual proxy statement.
Here’s what Fedex shareholders will vote on coming Monday.
Employee representation on the board
The Northstar Asset Management Inc. Funded Pension Plan is calling for Fedex’s board to prepare a report assessing what opportunities are available “for the company to encourage or facilitate the inclusion of non-man
Any proposal not backed by Fedex’s board of directors faces an uphill battle. Directors and executive officers hold 8.49% of outstanding common stock, the majority (7.89%) owned by Chairman and CEO Fred Smith.
agement employee representation on the Board.”
Northstar said news about the company’s handling of COVID-19 protections for employees is troubling, citing an NBC News report in which drivers said they aren’t getting the protections other delivery workers have.
“This provides an example of when leadership from rank-and-file employees on the board could have led to better integration of employees on oversight and implementation of responses that could have avoided undesirable press during a worldwide crisis,” Northstar said in its proposal.
The board said Fedex’s concern for employee wellbeing during the pandemic “is our top priority, as evidenced by the broad array of safety measures we have taken to protect them.”
The board added that it is best suited to find director nominees and stockholders can recommend candidates for consideration.
Report lobbying activity, expenditures
The International Brotherhood of Teamsters General Fund proposed Fedex provide full disclosure of direct and indirect lobbying activities and expenditures.
If approved, the Fedex disclosure would include lobbying policies and procedures, lobbying payments, company membership in organizations writing and endorsing model legislation and the decision-making process and oversight for lobbying payments. The union has filed the resolution since 2016.
“We are concerned Fedex’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions,” the Teamsters General Fund said.
Fedex’s board said the company is subject to extensive regulations already, adding that the expanded disclosure “could place Fedex at a competitive disadvantage by revealing our strategies and priorities.”
New executive compensation metrics
New York Comptroller Thomas Dinapoli, as trustee of the New York State Common Retirement Fund, proposed the board report how it plans to implement Environmental, Social and Corporate Governance (ESG) metrics into executive officer assessments. Integrating emission reduction goals, for example, into executive compensation “may encourage executives to achieve these goals,” Dinapoli said.
Fedex’s board said ESG metrics are already included as a performance measure in its annual incentive compensation program for executive officers. Further incorporation of these metrics isn’t necessary to encourage executives to prioritize ESG goals, it said.
Written consent by shareholders
Shareholder Myra K. Young, of Elk Grove, California, requested for the board to permit written consent by shareholders. This would allow shareholders to raise urgent issues without having to wait for the annual meeting, Young said.
Fedex’s board said holders of 20% or more of the company’s common stock may call a special meeting. The board said this threshold protects against a small shareholder minority initiating actions “that are not in the best interests of all our stockholders.”
The company’s largest shareholders include Dodge & Cox (10.3%), The Vanguard Group (7.91%) and Blackrock Inc. (6.64%).
Further political disclosure
Shareholder John Chevedden, of Redondo Beach, California, proposed Fedex disclose its policies and procedures for direct and indirect electoral spending. Chevedden said Fedex’s current disclosures should also include the trade associations it belongs to, along with non-deductible dues paid to each.
Fedex’s board echoed its response to the Teamsters’ proposal, saying it is “duplicative and unnecessary” as a reporting system for political contributions already exists. Since the measure would only apply to Fedex if approved, it would competitively harm the company, the board said.
Board of directors-backed proposals
The board is backing three proposals for shareholders to vote on:
1. Approve, on a non-binding basis, the overall compensation of named executive officers. These officers are Smith, CFO Alan Graf, President and COO Raj Subramaniam, CIO Rob Carter and Express CEO Don Colleran.
2. Ratifying Ernst & Young as the company’s independent registered public accounting firm for fiscal year 2021. Stockholder approval is not required to appoint Ernst & Young.
3. Elect the following people to Fedex’s board of directors: h Fred Smith, Chairman and CEO of Fedex h Raj Subramaniam, President and COO of Fedex h Marvin R. Ellison, president and chief executive officer, Lowe’s Companies Inc.
h Susan Patricia Griffith, president and chief executive officer, The Progressive Corp. h John C. Inglis, professor, U.S. Naval Academy h Kimberly A. Jabal, chief financial officer, Unity Technologies
h Shirley Ann Jackson, president, Rensselaer Polytechnic Institute h R. Brad Martin, chairman, RBM Ventures h Joshua Cooper Ramo, vice chairman, co-chief executive officer, Kissinger Associates Inc.
h Susan C. Schwab, professor emerita, University of Maryland School of Public Policy
h David P. Steiner, former chief executive officer, Waste Management Inc.
h Paul S. Walsh, executive chairman, Mclaren Group Limited
Max Garland covers Fedex, logistics and health care for The Commercial Appeal. Reach him at max.garland@commercialappeal.com or 901-5292651 and on Twitter @Maxgarlandtypes.