EX-10.50 5 c03116exv10w50.htm EXHIBIT 10.50 Exhibit 10.50
Exhibit 10.50
Compensation Arrangements with Named Executive Officers
Base Salaries
The following table sets forth the annual base salaries of FedEx’s named executive officers:
         
Name and      
Current Position   Base Salary  
 
Frederick W. Smith
  $ 1,236,060  
Chairman, President and
Chief Executive Officer
        
 
        
Alan B. Graf, Jr.
   $ 872,256  
Executive Vice President and
Chief Financial Officer
        
 
        
David J. Bronczek
  $ 910,236  
President and Chief Executive
Officer — FedEx Express
        
 
        
T. Michael Glenn
   $ 805,188  
Executive Vice President,
Market Development and
Corporate Communications
        
 
        
Robert B. Carter
  $ 737,160  
Executive Vice President,
FedEx Information Services and
Chief Information Officer
        
Mr. Smith’s base salary is effective as of July 16, 2010. The base salaries of the other named executive officers are effective as of July 1, 2010.
Fiscal 2011 Annual Incentive Compensation Program
Chairman, President and Chief Executive Officer
Frederick W. Smith’s fiscal 2011 annual bonus will be based on the achievement of corporate objectives for consolidated pre-tax income for fiscal 2011. The independent members of the Board of Directors, upon the recommendation of the Compensation Committee, may adjust Mr. Smith’s bonus amount upward or downward based on their annual evaluation of Mr. Smith’s performance, including the quality and effectiveness of his leadership and the following corporate performance measures:
  •   FedEx’s stock price performance relative to the Standard & Poor’s 500 Composite Index, the Dow Jones Transportation Average, the Dow Jones Industrial Average and competitors;
 
  •   FedEx’s stock price to earnings (P/E) ratio relative to the Standard & Poor’s 500 Composite Index, the Dow Jones Industrial Average and competitors;
 
  •   FedEx’s market capitalization;

 

 

 

  •   FedEx’s revenue and operating income growth relative to competitors;
 
  •   FedEx’s free cash flow (excluding business acquisitions), return on invested capital (excluding certain unusual items), and weighted average cost of capital;
 
  •   Analyst coverage and ratings for FedEx’s stock;
 
  •   FedEx’s U.S. and international revenue market share;
 
  •   FedEx’s reputation rankings by various publications and surveys; and
 
  •   FedEx’s restoration of remaining company matching contributions for 401(k) program.
None of these factors will be given any particular weight in determining whether to adjust Mr. Smith’s bonus amount.
Mr. Smith’s annual bonus target for fiscal 2011 is 130% of his annual base salary (at fiscal year-end), with a maximum payout of 300% of his target bonus.
Non-CEO Named Executive Officers
The fiscal 2011 annual bonus target payouts for the non-CEO named executive officers, as a percentage of annual base salary (at fiscal year-end), are as follows:
         
Name   Target Payout  
 
        
Alan B. Graf, Jr.
     90 %
David J. Bronczek
    100 %
T. Michael Glenn
     90 %
Robert B. Carter
     90 %
The maximum payout for each executive is 240% of his target bonus.
The fiscal 2011 annual bonus for the non-CEO named executive officers will be based on:
  •   the achievement of individual objectives established at the beginning of the fiscal year for each executive (30% of each executive’s target bonus); and
 
  •   the achievement of corporate objectives for consolidated pre-tax income for fiscal 2011 (70% of each executive’s target bonus).
The annual bonus payout opportunity relating to individual performance will be partially contingent upon achievement of consolidated pre-tax income objectives under the bonus plan (as well as achievement of the individual performance objectives). Mr. Smith will determine the achievement level of each executive’s individual objectives at the conclusion of fiscal 2011.
The annual bonus payout opportunity relating to company financial performance ranges, on a sliding scale, from a minimum amount if the annual bonus plan’s pre-established consolidated pre-tax income threshold is achieved up to a maximum amount if such financial performance goal is substantially exceeded. Ordinarily, our business plan objective for consolidated pre-tax income is the target under the annual bonus plan. For fiscal 2011, however, the annual bonus plan’s consolidated pre-tax income target and even the threshold for the portion of the payout opportunity relating to company financial performance are higher than the business plan objective for consolidated pre-tax income.

 

2 

 

Long-Term Incentive Program
FedEx’s long-term incentive (“LTI”) plans for the three-fiscal-year periods 2009 through 2011, 2010 through 2012 and 2011 through 2013, provide long-term cash bonus opportunities to members of upper management, including the named executive officers, upon the conclusion of fiscal 2011, 2012 and 2013, respectively, if certain aggregate fully diluted earnings per share (“EPS”) goals established by the Board of Directors are achieved with respect to those periods. No amounts can be earned for the fiscal 2009 through 2011, 2010 through 2012 and 2011 through 2013 plans until 2011, 2012 and 2013, respectively, because achievement of the EPS goals can only be determined following the conclusion of the applicable three-fiscal-year period.
Traditionally, the base-year number over which the three-year average annual EPS growth rate goals are measured for an LTI plan is the final full-year EPS of the preceding fiscal year. For the fiscal 2010 through 2012 LTI plan, an adjusted base-year number ($2.93) was used rather than the final fiscal 2009 EPS. This adjusted base-year number was set so that 12.5% growth from the number would equal the fiscal 2010 business plan EPS goal.
The following table sets forth the potential future payouts to each of FedEx’s named executive officers under FedEx’s LTI plans:
                                 
            Potential Future Payouts  
    Performance     Threshold     Target     Maximum  
Name   Period     ($)     ($)     ($)  
 
Frederick W. Smith
   FY2009–FY2011     875,000       3,500,000       5,250,000  
 
   FY2010–FY2012     875,000       3,500,000       5,250,000  
 
   FY2011–FY2013     875,000       3,500,000       5,250,000  
 
                                
Alan B. Graf, Jr.
   FY2009–FY2011     300,000       1,200,000       1,800,000  
 
   FY2010–FY2012     300,000       1,200,000       1,800,000  
 
   FY2011–FY2013     300,000       1,200,000       1,800,000  
 
                                
David J. Bronczek
   FY2009–FY2011     375,000       1,500,000       2,250,000  
 
   FY2010–FY2012     375,000       1,500,000       2,250,000  
 
   FY2011–FY2013     375,000       1,500,000       2,250,000  
 
                                
T. Michael Glenn
   FY2009–FY2011     300,000       1,200,000       1,800,000  
 
   FY2010–FY2012     300,000       1,200,000       1,800,000  
 
   FY2011–FY2013     300,000       1,200,000       1,800,000  
 
                                
Robert B. Carter
   FY2009–FY2011     300,000       1,200,000       1,800,000  
 
   FY2010–FY2012     300,000       1,200,000       1,800,000  
 
   FY2011–FY2013     300,000       1,200,000       1,800,000  
The potential individual future payouts set forth in the table above are set dollar amounts ranging from threshold (minimum) amounts, if the EPS goal achieved is less than target, up to maximum amounts, if the plan goal is substantially exceeded. There can be no assurance that the potential future payouts shown in this table will be achieved.

 

3