FedEx Shareholder Resolution 2009


RESOLVED, that stockholders of FedEx Corporation request the board of directors to adopt a policy that provides stockholders the opportunity at each annual stockholder meeting to vote on an advisory resolution, proposed by management, to ratify the compensation of the named executive officers (“NEOs”) set forth in the proxy statement’s Summary Compensation Table (the “SCT”) and the accompanying narrative disclosure of material factors provided to understand the SCT (but not the Compensation Discussion and Analysis).  The proposal submitted to stockholders should make clear that the vote is non-binding and would not affect any compensation paid or awarded to any NEO.  


Investors are increasingly concerned about mushrooming executive compensation especially when it is insufficiently aligned to the creation of stockholder value.

In 2008 stockholders filed close to 100 “Say on Pay” resolutions.  Votes on these resolutions averaged 43% in favor, demonstrating strong stockholder support for this reform.  Since then public sentiment and Congressional concern about executive compensation has reached new levels of intensity.

An Advisory Vote establishes an annual referendum process for stockholders about senior executive compensation. We believe the results of this vote would provide FedEx’s board and management useful information about stockholder views on the company’s senior executive compensation.

In its 2008 proxy Aflac submitted an Advisory Vote resulting in a 93% vote in favor, indicating strong investor support for good disclosure and a reasonable compensation package.  Daniel Amos, Chairman and CEO said, "An advisory vote on our compensation report is a helpful avenue for our stockholders to provide feedback on our pay-for-performance compensation philosophy and pay package."

A number of other companies have also agreed to an Advisory Vote, including Ingersoll Rand, Verizon, MBIA, H&R Block, Blockbuster, and PG & E.  And approximately 400 companies under TARP are now implementing the Advisory Vote, providing an opportunity to see it in action.

Influential proxy voting service RiskMetrics Group recommends votes in favor, noting: “RiskMetrics encourages companies to allow stockholders to express their opinions of executive compensation practices by establishing an annual referendum process. An advisory vote on executive compensation is another step forward in enhancing board accountability.”

The Council of Institutional Investors endorsed advisory votes and a bill to allow annual advisory votes passed the House of Representatives by a 2-to-1 margin in the last Congress.  We expect this legislation will pass in the near future.

We believe existing SEC rules and stock exchange listing standards do not provide stockholders with sufficient mechanisms for providing input to boards on senior executive compensation. In contrast, in the United Kingdom, public companies allow stockholders to cast a vote on the “directors’ remuneration report,” which discloses executive compensation. Such a vote isn’t binding, but gives stockholders a clear voice that could help shape senior executive compensation.

We believe that a company that has a clearly explained compensation philosophy and metrics, reasonably links pay to performance, and communicates effectively to investors would find a management sponsored Advisory Vote a helpful tool.