Reuters – Mon, Sep 10, 2012 5:03 PM EDT
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(Reuters) - The International Brotherhood of Teamsters is urging FedEx Corp (FDX) investors to push for an independent board chair, stripping that role from the company's chief executive officer, Fred Smith, citing share performance and executive pay.
In a letter to large FedEx institutional investors, the Teamsters said on Monday they are seeking support for their proposal for independent board leadership at the company's annual meeting on September 24.
"Having Smith as CEO and chairman of the board has lead to excessive executive pay and poor performance over the long term for investors," Ken Hall, general secretary-treasurer of the International Brotherhood of Teamsters, said in a statement.
FedEx employees, unlike those at larger rival United Parcel Service Inc (UPS), are considered independent contractors and are not represented by the Teamsters.
"This is a corporate governance concern that we push at a number of companies that we hold shares with," said Teamsters spokesman Galen Munroe.
A FedEx spokesman was not immediately available for comment.
The Teamsters introduced their proposal for independent board leadership at FedEx in 2007, and have pushed for similar action at other companies including Republic Airways Holdings Inc (RJET) and McKesson Corp (MCK), Munroe said.
About 36 percent of all FedEx investors backed the proposal for governance reform last year, up from roughly 26 percent when it was first proposed in 2007, the organization said. The percentage reached 42 percent in 2011, excluding shares held by CEO Smith and his family.
FedEx shares are up about 6 percent so far this year at $87.96 while UPS shares are little changed at $73.05.
The Teamsters said FedEx stock lagged the S&P 500 Index (.INX) as well as UPS shares over the past three- and five-year periods.
FedEx, which reports fiscal first-quarter results on September 18, cut its profit outlook on September 4, blaming a weak global economy.
The company, which has been overhauling its fleet to add more fuel-efficient planes and delay delivery of others, is expected to provide more detail on cost-cutting measures next week. FedEx has also announced a voluntary buyout.
Meantime, the CEO's pay increased by more than $7 million in fiscal 2011 to $13.7 million, "driven by massive non-equity incentive compensation," according to the Teamsters statement.
"While the company's focus has been to reduce costs by restructuring and cutting jobs, it seems the sky is the limit when it comes to CEO pay," said Hall.
Currently, the board has a "presiding director" position rather than an independent board chair position the Teamsters seek.
(Reporting by Lynn Adler in New York; editing by Matthew Lewis)
2 comments:
Sadly, the hostile environment that FredEx has created for us, the votes wouldn't happen then, now they probably would. All of the high seniority employees are about to be going out the door, they were happy because they had topped out pay and full pensions. Then you have the folks like myself, under 20 years that aren't topped out and loss of the true pension for the PPP load of horse crap. After us are the "new" crop, 10 years and under that really get the poop end of the stick. No chance of ever being topped out and only a small portion of the traditional pension.
What this did was make the "haves", the "have a littles" and the "have nots", and it pitted each group against each other. Then you factor in the "fear factor" that Fred created with his "anti-union" attitude and you have no chance. If we were able to vote it in now, I think it would pass with no problem, threats or no threats.
I agree brother. The employees at FedEx freight are so fed up with all this crap that they will vote yes for a union with any doubt. Go teamsters ! Vote yes for union! Vote yes for a brighter future!
Slick_teamster
SLG
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