FedEx (FDX): How I Voted – Proxy Score 69%

FedEx ($FDX) is one of the stocks in my portfolio. Their annual meeting is coming up on 9/24/2012. had collected the votes of four funds when I voted on 9/18/2012.  (A fifth fund is now reporting.) I voted with management 69% of the time.

I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions where something obviously warrants different treatment. According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay, Oxford Review of Economic Policy, Vol. 21, Issue 2, pp. 283-303, 2005), aggregate compensation by public companies to NEO increased from 5 percent in 1993-1995 to about 10 percent in 2001-2003.

Few firms want to admit to having average executives. They survey executive compensation at corporations and then set compensation packages that are above average for their “peer group,” which is often chosen aspirationally. While the “Lake Woebegone effect” may be nice in fictional towns, “where all the children are above average,” it doesn’t work well for society to have all CEOs considered above average and their collective pay spiraling out of control. We need to slow the pace of money going to the 1% if our economy is not to become third-world.

FDX’s SummaryCompensation Table (see page 45) shows Fredrick W. Smith, Chair and Chief Executive Officer, was the highest paid named executive officer (NEO) at over $7.26M in fiscal 2011. I’m using Yahoo! Finance to determine market cap and Wikipedia’s rule of thumb regarding classification. According to those sources, at about $27.6B FDX is a large-cap company. According to the United States Proxy Exchange (USPX) guidelines (pages 9&10), using data from Equilar, the median CEO compensation at large-cap corporations was $10.8 million in 2010, so FDX’s pay is below that median. However, three out of four funds reporting on voted against the pay package so I am inclined to do the same.

My policy is that when I vote against the pay plan I also vote against the compensation committee members, in this case: Steven R. Loranger, Shirley Ann Jackson, Susan C. Schwab, and Paul S. Walsh. I also voted in favor of measures to split the chair/CEO positions and report political contributions.

1Elect Director James L. BarksdaleForForForAgainstAgainst
2Elect Director John A. EdwardsonForForForForAgainst
3Elect Director Shirley Ann JacksonAgainstForAgainstAgainstAgainst
4Elect Director Steven R. LorangerForForForForAgainst
5Elect Director Gary W. LovemanForForForForAgainst
6Elect Director R. Brad MartinForForForForAgainst
7Elect Director Joshua Cooper RamoForForForForAgainst
8Elect Director Susan C. SchwabAgainstForForForAgainst
9Elect Director Frederick W. SmithForForForAgainstAgainst
10Elect Director Joshua I. SmithForForForAgainstAgainst
11Elect Director David P. SteinerForForForForAgainst
12Elect Director Paul S. WalshAgainstAgainstAgainstAgainstAgainst
13Ratify AuditorsForAgainstForAgainstFor
14Advisory Vote to Ratify Named Executive Officers’ CompensationAgainstForAgainstAgainstAgainst
15Require Independent Board ChairmanForForForForFor
16Report on Political ContributionsForForForForFor

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