Bonuses, awards for 5 at FedEx nearly $16.8 million

FedExFlyer

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Bonuses, awards for 5 at FedEx nearly $16.8 million



Others also compensated based on 'outstanding year'

By David Flaum
Commercial Appeal - Memphis, TN
July 16, 2005


FedEx Corp.'s top five executives have gotten annual bonuses and three-year incentive awards totaling nearly $16.8 million.

The Memphis-based freight carrier's compensation committee gave four of the five pay raises -- the fifth retired -- and boosted outside directors' pay, according to documents filed with the Securities and Exchange Commission.

"Thousands of FedEx employees received bonuses this year because we had an outstanding year in terms of financial performance," spokesman Jess Bunn said.

Shareholders were rewarded too.

FedEx's share price, $72.53 on June 1, 2004, when the fiscal year started, closed at $89.34 on May 31, the end of the year. During that period, FedEx paid dividends of 28 cents a share.

The biggest chunk of bonus money went to Frederick W. Smith, chairman, president and chief executive officer.

The compensation committee awarded him a $3.34 million bonus for the year ended May 31, based on goals for the company's pretax income. Last month, the company reported $2.3 billion in pretax income for that year, up 75 percent from the previous 12 months.

Other executives received bonuses under a program for headquarters employees.

David Bronczek, president and CEO of FedEx Express, the company's air freight arm, got $1.68 million based on Smith's evaluation of his personal objectives, Express's operating income and pretax income.

Three other executives listed in the filing received their bonuses based on Smith evaluations and pretax corporate income. They were:

Kenneth Masterson, then executive vice president, general counsel and secretary, $1.33 million;

Alan B. Graf Jr., executive vice president and chief financial officer, $1.31 million; and

T. Michael Glenn, executive vice president of market development and corporate communications, $1.22 million.

Separately, as part of a three-year pay program based on increases in per share earnings, Smith was awarded $3 million, Bronczek got $1.5 million and $1.125 million each went to Graf, Glenn and Masterson. Masterson retired June 1.

Per share profits went from $2.34 in 2002 to $4.72 this year. Smith, Bronczek, Graf and Glenn got 3.5 percent boosts in their base pay for the next year.

A National Association of Corporate Directors Blue Ribbon Committee on executive compensation said in 2003 that pay standards should be based on reported financial results of the company.

Executives should be rated on both quantitative measures, such as revenue, earnings, profit margins and stock market performance and qualitative standards such as advancement of company strategy, ethics, community relations and customer satisfaction.

The organization doesn't comment on pay at specific companies, said Doreen Kelly Ruyak, a spokesman.

In addition to the executive bonuses, cash payments to FedEx board members went up, although they will receive options for fewer shares this year -- 5,400 compared with 6,000 in 2004.

No reason was given for the changes.

Many companies are raising directors' pay, Ruyak said. "The time has gone up significantly with the compliance work from Sarbanes-Oxley," she said. Directors now put in as much as 250 hours a year for each board they're on, Ruyak said.
 
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capt. megadeth

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If a company is performing well, I really don't blink at this (I mean the pay is still ridiculously high but at least somewhat justified). It's the poorly performing companies that pay this crap out that upset me.
 

ultrarunner

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My wife, who is a senior executive, received 1.5 X her salary in a bonus last year, as well as a second, special stock option grant, etc....

The company she works for gave in excess of a 20% return on investment to it's stock holders. And the employees that work their we're compenstated and rewaded properly.

We got no problem with that.

FedEx did well, and the exec's that are running the outfit deserve the bonuses.

Those employee groups that choose to have union representation have placed what they get, in the hands of those who can negotiate it.

Simple as that. Thats the premise of the union. You don't deserve anything. It's all based on what you can negotiate!
 

PurpleTail

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Its seems like everyone has gotten a piece of the pie BUT the pilots. The executives, management, outstations get performance incentive bonuses, load teams get on time incentive bonuses, etc etc.

Ultrarunner is correct, we don't deserve anything more than what we negotiate, that is why we have to hold the companies feet to the fire and NOT give up or in! The pilots deserve some of the credit too and it is time for better work rules, scope, benefits, and, oh yea, PAY!

I am ready to walk if need be financially and physically.

ONE MORE DAY OF RETRO PAY!!!

My MEC speaks for me!
 
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Hugh Jorgan

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ultrarunner said:
My wife, who is a senior executive, received 1.5 X her salary in a bonus last year, as well as a second, special stock option grant, etc....
Dump her anyway.
 

mamba20

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The people who deserve a bonus are people who actually do work for the company.
 

capt. megadeth

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mamba20 said:
The people who deserve a bonus are people who actually do work for the company.
Very true statement.
 

ultrarunner

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You folks are all missing the big picture...that all changes when a group of employees decides to be represented by a union. They then only deserve whey they can sucessfully negotiate. Nothing more, nothing less. It's the reason you got a contract!

Those were some nice bonuses, were'nt they :)
 

satpak77

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mamba20 said:
The people who deserve a bonus are people who actually do work for the company.
actually they did....

If this was US Air or UAL we were talking about, mis-managed into Ch.11, only to see top execs still get bonuses, I would cry foul. But this is FedEx, THE air freight company in the business (no UPS doesn't take that honor) and has made various "Most Admired Companies" lists over the years.

Additionally, flash forward to 2005, and we could all say that FDX and UPS are amongst the most stable pilot jobs out there.

Lets not get caught up in AArogance, sure the FedEx pilots MAKE the mission happen and get it done successfully, but there are more people behind the mission than the pilots.

Careful with "if it wasn't for us, there would be no ______ (insert any airline)."

FedEx today is a 29 Billion dollar company with offices in over 220 COUNTRIES. More than a quarter of a million employees exist worldwide. 670 airplanes and 70,000 trucks carry FedEx packages.

No, the top managers are not flying Cat IIIs to mins, but they have a tough job also. And if their job does not get done, everyone suffers.

FedEx senior management is a large reason that the company is on the track that it is. Senior management is actually guiding the company towards MAKING MONEY, as in profits, as in MAKING ACTUAL PHYSICAL MONEY. The pilots are not. The Pilots of course can save money, do things efficiently, come up with new ideas, etc, but management is responsible for MAKING MONEY.

These bonuses were "in line" with Fortune 500 companies, we are not talking 5 Billion dollars or a diamond plated toilet seat re: Bernie Ebbers.

If you are unhappy with that fact, trade your pilot's license in for an MBA and choose a new career path.
 
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General Lee

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If a company is profitable, I have no problem with executives getting bonuses. IF it is NOT profitable, and they STILL GET BONUSES, then I have a problem with that. People (all employees hopefully) should profit in good times.


Bye Bye--General Lee
 

Rock

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Oh stop being so logical and rational. It takes all the fun out of biatching and whining.
 

PurpleTail

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Well if the bonuses were inline than the pilot group should get bonuses/raises in line with everyone else, which I am pretty sure is more than a pathetic 2.3% increase.

Management works 9-5, at best, have nice bennies and are home in bed every night. We are flying the back side of the clock, around the world, blah blah blah

Just give me a respectable raise, some better work rules, tighten up the scope a little and protect the retirees...is that so much to ask???
 

satpak77

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PurpleTail said:
Well if the bonuses were inline than the pilot group should get bonuses/raises in line with everyone else, which I am pretty sure is more than a pathetic 2.3% increase.

Just give me a respectable raise, some better work rules, tighten up the scope a little and protect the retirees...is that so much to ask???
Everyone else being who? AMR, NWA, UAL, Alaska, and US Air? In line with their "raises?"

According to Airline Pilot Central, a senior FDX captain earns $206 an hour with a 71 hour guarantee. That is $14,626 a month, or 175,512 a year.

That is more than all the majors, except DAL and NWA, who are both close to Ch.11 and suffering financially. DAL and NWA are maybe 20 bucks an hour more. NWA has 500 pilots on the street and DAL has 500-600 on the street. FDX has none.

I would argue your retirees are in much better shape than those at the above companies.

Not starting a fight, all above points are valid, however more and more in 2005 "just having a good flying job" is the new bar to obtain, versus "work for company X" and fly airplane Y.

For example, I actually knew a guy who LEFT SWA in the early 90's to go to AMR, so he could do "Europe in heavy iron". Of course he is laid off (or was laid off) and while he was a Wal-Mart greeter while on furlough, he likely would have made SWA Captain.

Oh well, he was more full of himself than he was actual brainpower.

As pilots sometimes we get carried away with our own self importance and supremacy....sometimes we need to "come back to earth" and re-assess how good we have it....

Fly Safe
 

pilot141

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satpak77 relax for a minute and recage your gyros.

The "everyone else" that Purple Tail was referring to is, I believe, FedEx management and non-union employees. In other words, he was only asking for something similar to what other emloyees at the SAME company got.

And your sob story is meaningless...we all know someone who regrets a decision he made. I have a good friend who left jetblue in August 2000 to go to AA. Yep, he's furloughed now and trying to get on at FedEx. Does this mean that we should all quake in our boots and just be happy to have a "good" job?

NO.

If you are willing to settle for a "good" job, I have no problem with that. But many people have spent many years and countless hours trying to make this job a "better" one.

The next time you sit back and contemplate how "good you have it", think about what the company would do for you if you poked out your eye when you opened up your garage tomorrow (I know someone who had this happen to him - a spring broke and he's now -1 eyeball). What, no love? What about a stroke or a heart attack? How about a busted recurrent checkride? How about a visit from your friendly FAA rep? Or a violation? Or a lawsuit from a passenger who says you didn't have the seatbelt sign on?

Has management really beaten down the pilot corps so much that we question our own value to the operation? Do we get lulled into the routine so much that we determine that what we do is "nothing special" and could be had for pennies on the dollar if only we weren't so greedy?

The next time you think that what you do is "nothing special", go back and review all of the checkrides you sweated out in your life. Think about the ground evals, the orals, the upgrades.....everything that got you to that cushy job in the left seat flying the trips you want. Yep....nothing at all to justify what you make....in fact a reporter from the local newspaper could ride along with you and announce to the public that anyone in the world could do your job...it only involves a little typing on a keypad.

Right?
 

capt. megadeth

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pilot141 said:
Has management really beaten down the pilot corps so much that we question our own value to the operation? Do we get lulled into the routine so much that we determine that what we do is "nothing special" and could be had for pennies on the dollar if only we weren't so greedy?

Pretty sad isn't it?

I wonder if executives scuabble amongst eachother in regards to whether or not they should get more money and/or how important their job is.

I could just see it now:

Dude #1: "Oh, quit your bitchin, at least you have a job. Besides $1 mil ain't so bad if you just cut out the yacht and 5th mistress. You are being way too greedy."

Dude #2: "Oh whatever, (insert executive's name here), you know how much responsibility we hold to the employees, taxpayers, etc? I deserve more. I mean, I know the company will probably file, but I have to ensure my pension. I mean, I am the CEO for God's sake"

Dude #3: "Now, now (insert the other executive's name here), you should just be happy doing what you have always set out to do. Who cares if you get more cash. I mean, you don't need to eat filet mignon every day, ya know?"

Things that make you go hmmm.......
 

AlbieF15

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Satpak77,

If I remember correctly you were considering applying to the airlines a year or two back, but decided at your age your secure gov'mint flying position was a good gig. Am I correct or have I remembered a different screen name?

Is there a bit of personal baggage in your post? By deciding NOT to leave, do you have to now make the job you passed less desirable? One trait I've seen in the past (especially from my military brethren) is a tendency to say "you guys should be happy with that"...and it lasts until they get hired a fly a year or two on the line and realize the demands of the job. I've also seen some retirees who passed on the airlines for whatever reason, then seem to second guess themselves down the road...and many of them are FULL of advice on what we should do and not do at our company. My take--they regret their decision and now cry "sour grapes".

This battle at FDX is a family squabble. There is a VERY nice apple pie on the table. The dad and big brothers and taking a VERY big slice. We'd like our piece to be a bit bigger, too. Dad may have planted the apple tree, and big brothers run the slicer and canners, but us little kids have been out in the orchard day and night day picking the apples. I think our piece after the GREAT harvest the last few years could be bigger than a 2.3% increase. Dad is still a good guy, and our brothers do a heck of good job at what they do. However, nobody sells even one apple if we don't pick them. Dad says if we keep complaining he'll go hire some migrant workers--but he knows we do a good job, and they are a big unknown. We know at some point he'd rather just give us a bit more pie than risk losing the orchard (and its customers)...so we'll see just how much.
 

satpak77

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gyros

All good points....and again I don't want to get into a bitching contest however when I see fellow pilots bitch about "how bad it is" at their place, sometimes it trips the "Let me Say Something" CB on my panel.

The underlying theme of my responses was not a direct volley against the two or three FDX posters on this thread, but more against the "it sucks here" attitude that ALL pilots tend to inherit even after reaching the "goal" of their pilot career.

Observe the thread got started as a "the execs dont work" type of thing, and they "dont deserve" their bonuses. Maybe those who are not happy with that need to get their MBA's and JD's and apply for the corporate office.

I know real estate agents that make $200K a year, and never fly one approach and are home M-F. Since I don't get a piece of that action, I guess its "wrong" that they should get that much?

Flip it around and we have blue collar workers and laborers, driving bulldozers all day long, at low wages, with no benefits. They see "airline pilots" are underworked, overpaid people who get to see Europe for free and work 4 days a month. Of course thats another incorrest assessment.

My words to them are the same, park the bulldozer and get your pilot's license.

Albie- I am sticking around until I retire, then I will try to join you guys and we can respond to non-FDXers on Flightinfo and chastise them :D

Everybody Fly Safe ;)
 

PurpleTail

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satpak77 said:
All good points....and again I don't want to get into a bitching contest however when I see fellow pilots bitch about "how bad it is" at their place, sometimes it trips the "Let me Say Something" CB on my panel.

The underlying theme of my responses was not a direct volley against the two or three FDX posters on this thread, but more against the "it sucks here" attitude that ALL pilots tend to inherit even after reaching the "goal" of their pilot career.

Observe the thread got started as a "the execs dont work" type of thing, and they "dont deserve" their bonuses. Maybe those who are not happy with that need to get their MBA's and JD's and apply for the corporate office.

I know real estate agents that make $200K a year, and never fly one approach and are home M-F. Since I don't get a piece of that action, I guess its "wrong" that they should get that much?

Everybody Fly Safe ;)
SATPAK~

What don't you get??? Nobody is complaining about our job or how bad we have it. Kudos to management for making some great decisions. Most pilots here at FedEx love being here (me included), showing up for work and helping the company grow and be profitable.

Just like Albie said, very interestingly, we just want a piece of the pie as well, like everyone else, at FedEx, is getting. How is it a company can be making SO MUCH MONEY yet DAL pilots are getting paid MORE, even after their 30% paycut, and they are bleeding money???

It is time for the FedEx pilot group to set the bar in the industry because if we don't who will???
 
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