Summary
This SEC Form 8-K filing by FedEx Corp. on July 13, 2005, details executive and director compensation decisions for fiscal year 2005 (ending May 31, 2005). The report confirms the annual bonus payouts for key executives, including CEO Frederick W. Smith, whose bonus was $3,343,376. It also outlines payouts under a long-term incentive plan, where all eligible participants received maximum bonuses due to exceeding an aggregate earnings-per-share goal for fiscal years 2003-2005. Additionally, the filing announces new base salaries for named executive officers, reflecting a 3.5% increase, and details the updated compensation structure for non-management directors, including retainers, meeting fees, and stock options for new directors.
Key Highlights
- 1FY2005 annual bonus of $3,343,376 approved for CEO Frederick W. Smith.
- 2Non-CEO named executive officers received FY2005 annual bonuses ranging from $1,216,985 to $1,678,508.
- 3Maximum payouts under the FY2003-FY2005 Long-Term Incentive Plan were awarded to all eligible participants.
- 4CEO Frederick W. Smith received $3,000,000 under the Long-Term Incentive Plan.
- 5New annual base salaries for named executive officers (excluding Mr. Masterson) were increased by 3.5%.
- 6A revised compensation structure for non-management directors, including quarterly retainers and per-meeting fees, effective July 2005.
- 7New outside directors will receive a stock option grant for 5,400 shares of common stock upon appointment or at the 2005 annual meeting.
Frequently Asked Questions
The CEO's bonus was primarily determined by the achievement of consolidated pre-tax income for FY2005. The Compensation Committee also had the discretion to adjust the bonus based on factors like stock performance relative to major indices, competitive revenue and operating income growth, cash flow, return on invested capital, market share, reputation rankings, and an assessment of leadership quality.
All eligible participants received maximum payouts because FedEx's performance for the three-fiscal-year period (FY2003-FY2005) substantially exceeded the aggregate earnings-per-share goal that had been established by the Compensation Committee for this plan.
Effective July 2005, non-management directors will receive a quarterly retainer of $16,250, fees for attending Board and committee meetings (varying for in-person and telephonic meetings, with higher rates for the Audit Committee), and additional annual fees for committee chairpersons. New directors elected at or after the 2005 annual meeting will receive a stock option for 5,400 shares.
Kenneth R. Masterson, former Executive Vice President, General Counsel, and Secretary, retired effective June 1, 2005. The filing details his FY2005 annual bonus and his payout under the Long-Term Incentive Plan, reflecting his compensation prior to retirement.