| FedEx Cuts Wages &
Retirement Compensation |
| While CEO Rakes in
Multi-Million Dollar Pension |
| By JD Nutt, Web Editor |
| From the RD
News Desk |
| Report Last Updated: 12.19.2008 |
| (Washington, D.C.) – FedEx Corp.
[NYSE: FDX] announced drastic cuts in pay and deferred compensation for
most of its U.S. workforce. Salaried U.S. FedEx employees will take
permanent 5 percent to 10 percent base salary reductions while FedEx
founder, Chief Executive and Chairman Fred Smith will take a permanent
20 percent reduction in base salary. According to company statements,
hourly employees will not see base wages impacted in this round of cost
controls. |
|
“The FedEx workers that have made this company a
household name and deliver the profits will now shoulder more insecurity
for their futures,” said Teamster General President Jim Hoffa. “At
the busiest time of their delivery season, the company is delivering
nothing but coal for its workforce.” |
|
More dramatically for hourly employees, bonus
compensation and the company’s 401(k) matching contribution will cease
for 2009. This unilateral decision to stop 401(k) matches closely
follows the June 2008 capping of FedEx Express employees’ defined
benefit pension. In announcing the end of the defined benefit plan in
2007 FedEx said, “Planning and saving for retirement is a partnership
between FedEx and its employees, and we are committed to helping our
employees enjoy a financially sound future,” |
|
Apparently, that “partnership” is no longer part
of the corporation’s future. |
|
Although garnering headlines for his salary
adjustment, Smith meanwhile retains $26,411,752 accrued under the FedEx
Retirement Parity Pension Plan and $1,164,464 under the Employees’
Pension Plan. Additionally, Smith’s $1.4 million salary only comprised
13 percent of the $10.9 million that he raked in for 2008. In fact, 55
percent of Smith’s 2008 pay was in stock options not tied to any
performance goals. |
|
As of May 31, Smith also held currently exercisable,
in-the-money options worth $24.9 million, based on yesterday’s closing
stock price. In the past two years alone, he’s exercised options worth
more than $60 million. FedEx has not clarified if the company’s
variable compensation changes will affect Smith’s outstanding,
exercisable options or if FedEx will suspend option grants for 2009. |
|
“FedEx workers have seen their wages stagnate,
their health care costs go up and their retirement benefits go down or
go away entirely while FedEx has pocket ed millions in profits in good
times,” said Teamsters Vice President At Large and Package Division
Director Ken Hall. “Many FedEx workers already see Teamster
representation as a way to secure their future and these drastic
measures will convince more of the value of a Teamster contract.” |
|
The difference in pay and compensation between
management and workers is one factor leading FedEx workers to seek
Teamster representation. The broken “Purple Promises” on wages and
retirement benefits were the subject of a public Blue Ribbon Commission
hearing on Dec. 16, jointly sponsored by the Teamsters, the Los Angeles
County Federation of Labor, and Clergy and Laity for Economic
Justice/Los Angeles (CLUE LA). |
|
Blue Ribbon Commission members U.S. Rep. Linda
Sanchez, Los Angeles City Councilman Bill Rosendahl and United Methodist
Church (Los Angeles) Bishop Mary Ann Swenson heard testimony from a
number of FedEx workers on their deteriorating work conditions and
struggles to hold onto the middle class life. |
| “I could afford to retire at age 62
under the defined benefit pension plan but with the stroke of a pen, and
with little warning and no input or discussion from employees, FedEx
changed our retirement plans,” said Dan Forrand, a 15-year veteran
aircraft maintenance technician from FedEx Express in Los Angeles. |
| Now, as the economy suffers and FedEx
Express employees’ retirement security is in greater jeopardy, FedEx
has pulled a bait and switch more drastic than even Forrand knew on
Tuesday. |
| Forrand’s statement and other
testimony and questions are archived online at www.fedxmx.com.
Additional information is at www.FedExWatch.com |
