John A. Smith
Chief Operating Officer – United States and Canada, Federal Express at FDX
Executive
About John A. Smith
John A. Smith is Chief Operating Officer — United States and Canada at Federal Express, age 63 as of July 21, 2025, and has served in the COO role since June 1, 2024, following prior CEO roles at FedEx Ground and FedEx Freight with a two-decade operational track record across LTL and ground networks . His incentive design is tied to FedEx’s AIC and LTI frameworks: FY25 adjusted consolidated operating income came in at $6,120 million vs. a $7,245 million target, resulting in below-target AIC payouts ; the FY23–FY25 LTI plan’s metrics included adjusted EPS, CapEx/Revenue, and relative TSR with actual outcomes of adjusted EPS $49.88 vs. $82.31 target, CapEx/Revenue 5.8% vs. 6.9% target, and relative TSR “>25% up to 50%” of the S&P 500, yielding a $913,194 LTI cash payout for Mr. Smith . He received a one-time special award of 415 restricted shares in June 2024 in recognition of contributions to Network 2.0 and digital transformation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Federal Express | Chief Operating Officer — U.S. & Canada | Jun 2024–present | Operational leadership across U.S./Canada pickup, transport, and delivery; contributions to Network 2.0 and digital initiatives recognized via special equity grants |
| Federal Express | President & CEO — U.S. & Canada Ground Operations | Apr 2023–May 2024 | Managed consolidated ground operations during “one FedEx” and Network 2.0 transformation |
| FedEx Ground | President & CEO | Jun 2021–Apr 2023 | Led ground network operations and performance through e-commerce volume cycles |
| FedEx Ground | President & CEO–Elect | Mar 2021–May 2021 | Transition leadership for ground segment |
| FedEx Freight | President & CEO | Aug 2018–Feb 2021 | Ran LTL segment; earlier roles included SVP Operations and VP Safety/Fleet/Facilities |
| FedEx Freight and FedEx National LTL | Various VP/SVP Operations roles | 2008–2018; prior management 2000–2008 | Fleet, safety, facilities, and network operations management |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| New publicly traded company (to be created upon separation of FedEx Freight) | President & CEO (designate) | Selected by 2025 | Selection introduces future leadership transition considerations |
Fixed Compensation
| Item | Fiscal Year | Amount/Detail |
|---|---|---|
| Base salary (paid) | FY2025 | $899,656 |
| Base salary (rate) | Effective Oct 1, 2024 | $912,024 |
| Target AIC bonus % | FY2025 | 120% of base salary paid |
| Actual AIC payout | FY2025 | $261,800 |
| Perquisites and tax payments | FY2025 | Tax payments on restricted stock $668,491; business-related aircraft use $6,922; total other compensation $675,413 |
Performance Compensation
Annual Incentive Compensation (AIC) – FY2025 Company Metrics
| Metric | Threshold | Target | Maximum | Actual |
|---|---|---|---|---|
| Adjusted Consolidated Operating Income ($mm) | $6,077 | $7,245 | $7,332 | $6,120 |
AIC – FY2025 Individual Target vs. Payout
| Name | Target AIC ($) | Actual AIC ($) |
|---|---|---|
| John A. Smith | $1,079,587 | $261,800 |
Long-Term Incentive (LTI) – FY23–FY25 Plan Structure and Outcomes
| Metric | Weighting | Target | Actual | Individual Payout |
|---|---|---|---|---|
| Adjusted EPS (aggregate) | 50% | $82.31 | $49.88 | $913,194 (cash) |
| CapEx/Revenue | 25% | 6.9% | 5.8% | Included in above payout |
| Relative TSR | 25% | “>50% up to 75% of S&P 500” | “>25% up to 50% of S&P 500” | Included in above payout |
| Vesting/Payment | — | 3-year period | Cash payout post-period | Plan pays in cash upon plan completion |
Forward AIC Alignment – FY2026 Plan (approved Sep 29, 2025)
| Plan Feature | FY2026 Design |
|---|---|
| Metrics | Adjusted consolidated operating income (50%); incremental structural cost reduction from DRIVE/Network 2.0 (25%); on-time service performance (25%) |
| Target AIC % (John A. Smith) | 120% of base salary paid |
| Aggregate max payout | 125% of target |
Equity Ownership & Alignment
Beneficial Ownership (as of Aug 4, 2025)
| Holder | Shares Owned | RSUs | Option Shares | Percent of Class | Notes |
|---|---|---|---|---|---|
| John A. Smith | 33,035 | — | 78,061 | <1% (“*”) | Includes 3,363 shares held by The Smith Living Trust |
Stock Ownership Guidelines and Compliance
- Executive officers must hold 3x annual base salary; unvested restricted shares/RSUs count, options do not. As of Aug 4, 2025, each named executive officer exceeded or was within the five-year compliance window . Hedging, short sales, and most derivatives are prohibited; margin accounts and pledges are prohibited with limited case-by-case exceptions — and no other FedEx executive officer or Board member currently has pledged FedEx securities .
FY2025 Equity Grants
| Grant Date | Stock Options (qty) | Restricted Shares (qty) |
|---|---|---|
| Jun 27, 2024 | 11,126 | 3,527 (includes 415 special) |
Outstanding Awards and Scheduled Vesting (selected tranches; as of FY2025 year-end)
| Vest Date | Restricted Shares |
|---|---|
| Jun 14, 2025 | 2,417 |
| Jun 30, 2025 | 3,389 |
| Jun 30, 2026 | 3,389 |
| Jun 22, 2025 | 3,860 |
| Jun 22, 2026 | 3,859 |
| Jun 22, 2027 | 3,860 |
| Jun 27, 2025 | 2,781 |
| Jun 27, 2026 | 2,782 |
| Jun 27, 2027 | 2,781 |
| Jun 27, 2028 | 2,782 |
Vested in FY2025
| Item | Shares | Value Realized ($) |
|---|---|---|
| Restricted Stock Vested | 3,917 | $1,011,594 |
| Options Exercised | 6,155 | $446,313 |
Employment Terms
Management Retention Agreements (MRAs) and Equity Treatment
- No fixed-term employment agreement; executives are entitled to specific benefits upon termination or change of control, including accelerated vesting of restricted stock upon retirement at/after age 60, death, permanent disability, or change of control; stock options accelerate upon death, disability, or change of control .
- MRAs auto-renew annually; upon change of control, establish a two-year employment agreement preserving role, authority, duties, and compensation opportunities; termination benefits apply upon qualifying termination (double trigger) .
- Qualifying termination benefits: lump-sum cash equal to two times base salary plus two times target AIC, paid six months after termination, plus 18 months of medical/dental/vision coverage; non-compete for one year post-termination; 280G/4999 cutbacks to avoid excise tax .
Quantified Potential Payments (as of May 31, 2025)
| Scenario | Base Salary ($) | AIC ($) | Restricted Stock Acceleration ($) | Health Benefits ($) | Total ($) |
|---|---|---|---|---|---|
| Change of Control + Qualifying Termination (John A. Smith) | 1,824,048 | 2,159,174 | 1,894,635 | 63,689 | 5,941,546 |
Insurance and Disability
- Group term life insurance coverage $1,500,000; business travel accident coverage $500,000; supplemental long-term disability equal to 60% of basic monthly earnings, generally until age 65 .
Clawback Policies
- Mandatory recoupment for “Big R” and “little r” restatements; additional policy allows clawback for fraud or willful misconduct causing reputational or financial harm; applies to current/former Section 16 officers .
Investment Implications
- Pay-for-performance alignment: AIC and LTI are heavily weighted to long-term metrics (EPS, CapEx/Revenue, relative TSR; FY26 adds structural cost reductions and service quality), signaling strong linkage to operational and financial outcomes. FY25 underperformance on adjusted operating income and LTI metrics resulted in below-target payouts for Smith, indicating disciplined plan calibration .
- Retention and transition risk: Smith’s selection to lead the future publicly traded company created from FedEx Freight suggests potential internal succession and transition dynamics at Federal Express; however, MRAs and equity acceleration policies mitigate abrupt departure risks while imposing non-compete obligations .
- Insider selling pressure: Multiple scheduled RSU vesting tranches through FY2028 and FY2025 vesting of 3,917 shares may create episodic liquidity events; however, prohibitions on hedging/pledging and ownership goals support long-term alignment. Smith’s beneficial ownership of 33,035 shares, plus 78,061 option shares, is below 1% of shares outstanding but meets company guidelines given the 3x salary requirement and counting of unvested restricted shares for compliance .
- Governance and shareholder friendliness: No tax gross-ups in the conventional sense for restricted stock; robust clawback policies; severance limited to ≤2.99x salary + target AIC absent shareholder approval; 280G cutback to avoid excise taxes — all reduce governance red flags and pay inflation risk .