8-KLeadership Changes

FEDEX CORP 8-K Report, Executive Changes (Feb 20, 2019)

Filed February 20, 2019For Securities:FDX

Summary

FedEx Corp. (FDX) filed an 8-K report on February 20, 2019, primarily announcing a significant executive leadership change. Effective March 1, 2019, Rajesh Subramaniam was appointed as the Company's President and Chief Operating Officer. Mr. Subramaniam will continue to hold his role as President and Chief Executive Officer of FedEx Express, consolidating key operational leadership under his purview. This appointment is accompanied by a revised compensation package for Mr. Subramaniam, including a promotional bonus, an increase in his base salary, and adjustments to his incentive compensation targets under both annual and long-term plans. Investors should note that his incentive payouts are tied to corporate objectives, specifically adjusted consolidated operating income, and individual performance metrics.

Key Highlights

  • 1Rajesh Subramaniam appointed President and Chief Operating Officer of FedEx Corporation, effective March 1, 2019.
  • 2Mr. Subramaniam retains his position as President and Chief Executive Officer of FedEx Express.
  • 3New annual base salary for Mr. Subramaniam will be $955,560, effective March 1, 2019.
  • 4Mr. Subramaniam will receive a promotional bonus of $150,000, payable in two installments.
  • 5His target payout under the 2019 Annual Incentive Compensation Plan (AIC Plan) will be based on a tiered percentage of his salary depending on his role during fiscal 2019, with a target opportunity of $810,181.
  • 6Long-term incentive plans (FY2017-FY2019, FY2018-FY2020, FY2019-FY2021) will be prorated based on his service in different roles.
  • 7Payout opportunities for long-term incentive plans show increasing potential target and maximum payouts across the mentioned performance periods.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce the appointment of Rajesh Subramaniam as the President and Chief Operating Officer of FedEx Corporation and to detail the related changes in his compensation package.

This appointment suggests a consolidation of leadership and operational oversight at the corporate level, with Mr. Subramaniam directly managing the overall operations of FedEx Corporation while also leading the critical FedEx Express division. This could indicate a strategic move to streamline decision-making and execution across the company's core logistics operations.

His compensation sees an increase in base salary to $955,560, a promotional bonus of $150,000, and adjustments to his annual and long-term incentive plan targets. His annual incentive target opportunity is $810,181, with maximum potential payouts under long-term incentive plans reaching up to $2.6 million over specified periods.

His incentive payouts, both annual and long-term, are primarily based on the achievement of corporate objectives, specifically adjusted consolidated operating income. Individual performance objectives also play a role, particularly in the downward adjustment of annual incentive payouts by the CEO.