8-KLeadership ChangesExhibits & Filings

FEDEX CORP 8-K Report, Executive Changes (Jun 9, 2009)

Filed June 9, 2009For Securities:FDX

Summary

FedEx Corporation (FDX) filed an 8-K on June 9, 2009, announcing two key developments. Firstly, the Board of Directors elected Ambassador Susan C. Schwab as an independent director, effective immediately. She has also been appointed to the Compensation Committee. Her election brings the total Board size to 12 members and her term will expire at the September 2009 annual meeting, subject to renomination and stockholder approval. Secondly, FedEx's Board approved a new Long-Term Incentive Compensation (LTI) plan for FY2010-FY2012. This cash-based plan for management, including named executive officers, is tied to aggregate diluted earnings-per-share (EPS) growth over the three-year period. The plan outlines target payouts at 12.5% EPS growth, with potential for higher payouts up to 150% of target for 15% or greater growth, and lower payouts down to 25% of target for 5% growth. Notably, the base year for calculating EPS growth has been adjusted to account for the current economic climate.

Key Highlights

  • 1FedEx elected Ambassador Susan C. Schwab as an independent director to its Board of Directors, effective June 8, 2009.
  • 2Ambassador Schwab has been appointed to the Compensation Committee of the Board.
  • 3The election of Ambassador Schwab increases the FedEx Board of Directors to 12 members.
  • 4FedEx approved a new Long-Term Incentive Compensation (LTI) plan for fiscal years 2010-2012.
  • 5The LTI plan is a cash-based incentive for management tied to aggregate diluted EPS growth over the three-year period.
  • 6Payout targets for the LTI plan range from 25% of target for 5% EPS growth to 150% of target for 15% or higher EPS growth.
  • 7The base year for EPS growth calculation in the LTI plan has been modified to address the current economic environment.

Frequently Asked Questions

Ambassador Susan C. Schwab is an independent director elected to the FedEx Board of Directors. She was selected with assistance from a third-party executive search firm and recommended by senior FedEx leadership. Her appointment expands the Board to 12 members and she will serve on the Compensation Committee. She is considered independent under NYSE and FedEx's standards.

The new LTI plan is a cash-based incentive program for FedEx management, including executive officers, designed to reward sustained performance over a three-year period (FY2010-FY2012). Payouts are directly linked to the achievement of specific aggregate diluted earnings-per-share (EPS) growth targets.

The plan targets a 12.5% average annual EPS growth rate over the three-year period for target payouts. Payouts can be higher, up to 150% of target if the growth rate reaches 15% or more, or lower, down to 25% of target if the growth rate is 5%. No payment is made if the growth rate is below 5%.

FedEx modified the base year for calculating EPS growth by setting it to the FY2010 business plan EPS goal minus 12.5%. This adjustment was made to account for the current economic environment and earnings stream, aiming to restore the motivating power of the incentive plan.