Proxy Blog

Fedex Corporation

September 6, 2019

The annual proxy for this courier delivery service had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on:
    -Lobbying disclosure
    -Employee representation on the board 

Magni voted as follows: 

  1. For and against the proforma proposals.
    -For directors  The board has a majority of independent directors and some have CEO/CFO experience with other companies. The compensation of directors is disclosed with a meaningful portion in equity where the equity has restrictions to align director incentives with long-term value creation. 
    -For auditors – There appear to be no controversies with the financial statements of the company.
    -Against say-on-pay” – The proxy materials disclosed a shareholder engagement program, though the level of activity was not disclosed and the topics for the meetings did not include executive compensation. The peer group was listed in an appendix, however the disclosures regarding the criteria were superficial and the company was not compared to the companies on the list. 
  2. Against the shareholder proposals.
    -Against lobbying disclosure – This vote was very difficult. The shareholder proposal was too intrusive and appeared designed to restrict company activities, as opposed to simply disclosing lobbying. CurrentlyFedex disclosures appear to meet minimum legal and regulatory requirements. Good corporate governance is demonstrated by strong and clear disclosure without the disclosure limiting activities that management considers in the company’s best interests. Since the shareholder proposal is an overreach, Magni voted against it.
    -Against employee representation  This vote was also difficult. Generally, a company should have the latitude to suggest director candidates that best meet the company’s interests. The shareholders then get the opportunity to approve (or reject) those candidates. Despite FedEx’s overall strong governance program, it has been subject to significant fines (per the supporting statement in the proposal). Magni voted against the shareholder proposal, though may vote differently in the future if Fedex continues to have employee issues.