FedEx cuts CEO pay
FedEx Corp. cut CEO Fred Smith’s pay by 20% and will trim smaller amounts from US salaried employees
About 12% of the workforce will be affected by the pay reductions, which will be 5% for US salaried employees and as much as 10% for senior executives. Hiring will be frozen and contributions to retirement accounts suspended for at least a year, FedEx said today in a statement.
The moves are part of $200m in new savings toward a goal of more than $1 bn for the year as Memphis, Tennessee- based FedEx confronts “some of the worst economic conditions” in its 35-year history. U.S. air shipments fell 8 percent for the biggest drop in seven years last quarter as businesses and consumers curbed spending because of the recession.
FedEx Chief Financial Officer Alan Graf said volume patterns deteriorated during the quarter ended Nov. 30 on declines in industrial production and consumer spending, and that “we don’t believe we have reached the bottom.”
The pay cuts accompanied FedEx’s announcement that net income in the second quarter climbed to $493m, or $1.58 a share, matching the average estimate of 12 analysts in a Bloomberg survey. Profit a year earlier was $479m, or $1.54. Revenue rose 1% to $9.54bn, the smallest quarterly increase in at least nine years.
