Exit of FedEx executive jolts Wall Street

FedEx Corp. threw Wall Street for a loop, announcing the resignation of CEO Fred Smith’s top deputy just weeks after he joined the company’s board.

Raj Subramaniam will take over as president and chief operating officer March 1, replacing David Bronczek, the shipping giant said in a statement Thursday. Bronczek, 64, made a “personal decision” to retire, the company said. He had been with FedEx since 1976, serving in several key executive roles.

The sudden departure — and a subdued sendoff from Smith — immediately made waves on Wall Street. Bronczek had just been named to the board Jan. 28, a month after Subramaniam, 52, was promoted to lead FedEx Express, the company’s largest business unit. The latest change vaults Subramaniam to the front of the line as heir apparent to Smith, 74, as FedEx contends with a slowdown in international markets and a lagging stock price.

“Something must have surfaced in the last two weeks to bring about this change. There’s no other way it could happen,” said Satish Jindel, founder of SJ Consulting Group. “It just doesn’t seem normal. You don’t appoint someone to the board and then in two weeks you say he’s retiring.”

The shares fell 2.5 percent to $179.30 Friday in New York. FedEx fell 24 percent over the 12 months through Thursday, compared with a 4.9 percent gain for rival United Parcel Service Inc.