John W. Dietrich
Executive Vice President and Chief Financial Officer at FDX
Executive
About John W. Dietrich
Executive Vice President and Chief Financial Officer (CFO) of FedEx since August 1, 2023; initially appointed CFO‑Elect on July 17, 2023. He was 58 at appointment and previously served as CEO of Atlas Air Worldwide, bringing >30 years of aviation and air cargo operating and financial experience; he also serves on AAR Corp.’s board and has held leadership roles at IATA and NACA . Pay-for-performance linkage is notable: FY2025 annual incentive (AIC) paid well below target after adjusted consolidated operating income missed targets, and long-term incentive (LTI) payouts for FY23–FY25 were below target (EPS component below threshold; relative TSR below target) despite maximum achievement on CapEx/Revenue; a one-time PSU grant in FY2026 requires multiyear operating margin expansion to vest, further aligning incentives to FedEx’s DRIVE/Network 2.0 execution .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Atlas Air Worldwide | President & CEO; Director | 2020–2023 | Led global outsourced aviation services; prior COO with end-to-end operational oversight |
| Atlas Air Worldwide | President & COO | 2019–2020 | Transition to CEO; operational leadership |
| Atlas Air Worldwide | EVP & COO | 2006–2019 | Ran global operations; drove performance and safety |
| Atlas Air Worldwide | SVP GC & CHRO; Corp. Secretary; led IT/Comms | 2003–2006 | Built governance, talent, and infrastructure capabilities |
| United Airlines | Various roles | ~1990–2003 | 13 years of airline operating experience |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| AAR Corp. | Director | Current | Public company board experience (aviation services) |
| IATA | Board of Governors (member) | Current | Global airline policy/standards engagement |
| NDTA | Chairman | Current | National logistics and defense transportation leadership |
| NACA | Member; former Chairman | Past/Current | U.S. air carrier association leadership |
Fixed Compensation
| Component ($) | FY2024 | FY2025 |
|---|---|---|
| Salary (actual paid) | 822,505 | 965,502 |
| Sign-on/Bonus paid | 100,000 (signing bonus installment) | 100,000 (signing bonus installment) |
| Base salary rate (effective Oct 1 preceding FY end) | — | 974,967 (effective Oct 1, 2024) |
| Target AIC (% of base) | 120% | 120% |
Notes: Initial offer set base salary at $919,000 with 120% AIC target and eligibility in FY22–FY24, FY23–FY25, FY24–FY26 LTIs; new‑hire equity of $1.6M restricted stock (incl. tax payment) and $1.5M options, vesting ratably over 4 years .
Performance Compensation
- AIC design and FY2025 outcomes
- Metric: adjusted consolidated operating income (single metric for FY2025) . Targets (in $mm): Threshold 6,077; Target 7,245; Max 7,332; Actual 6,120 .
- Dietrich AIC payout: Target $1,158,602 vs Actual $275,168 (below target) .
- LTI design and FY2025 outcomes
- FY23–FY25 LTI metrics: 50% adjusted EPS growth (threshold 5%, target 15%, max ≥20%); 25% CapEx/Revenue (max achieved); 25% relative TSR (below target). Overall below-target payout .
- Dietrich LTI payout (prorated participation): $218,750 in FY2024 and $666,667 in FY2025 .
- FY2026 AIC plan (reinstated Sept 29, 2025)
- Metrics/weights: Adjusted consolidated operating income 50%; DRIVE/Network 2.0 structural cost reductions 25%; On‑time service 25% .
- Target AIC opportunity: 120% of base; plan max 125% of target .
- One-time FY2026 PSU grant (granted Sept 28–29, 2025)
- Cliff vesting Dec 31, 2028; payout tied to basis-point improvement in FY2028 adjusted consolidated operating margin vs FY2025 (ex-FedEx Freight): 0% if <100 bps; 25% at 100 bps; 50% at 200 bps; 100% at 300 bps; 150% at ≥400 bps. Dietrich target value: $825,000 .
AIC performance table (FY2025):
| Measure | Threshold | Target | Maximum | Actual |
|---|---|---|---|---|
| Adjusted Consolidated Operating Income ($mm) | 6,077 | 7,245 | 7,332 | 6,120 |
Incentive payouts ($):
| Type | FY2024 | FY2025 |
|---|---|---|
| AIC Payout | 649,035 | 275,168 |
| LTI Payout | 218,750 | 666,667 |
Equity Ownership & Alignment
- Beneficial ownership (as of Aug 4, 2025): 15,662 shares; 11,827 option shares; <1% of outstanding (235,948,121 shares outstanding) .
- Unvested equity at FY2025 year-end (see next section) includes 6,124 unvested shares/units (market value $1,335,644) .
- Ownership guidelines: Executive officers must hold 3x base salary (unvested restricted stock/RSUs count; options excluded). As of Aug 4, 2025, each executive officer either met the goal or was within the five‑year compliance window .
- Hedging/Pledging: Prohibited to hedge, short, or pledge FedEx shares (case‑by‑case pledge exceptions possible with strict capacity test; only prior exceptions disclosed relate to former Executive Chairman). No Dietrich pledges disclosed .
- Insider trading controls: Strict trading windows, blackout periods, and pre‑clearance under the Securities Manual .
Beneficial ownership snapshot:
| Item | Amount |
|---|---|
| Shares owned | 15,662 |
| Option shares (exercisable within 60 days) | 11,827 |
| Percent of class | <1% |
Outstanding Equity Awards & Vesting
| Award | Status | Shares/Units | Exercise/Grant Price | Expiration/Vest | Notes |
|---|---|---|---|---|---|
| Stock options | Exercisable | 4,172 | $259.85 | 7/19/2033 | New‑hire equity vests ratably over 4 years |
| Stock options | Unexercisable | 12,516 | $259.85 | 7/19/2033 | |
| Stock options | Unexercisable | 13,933 | $292.13 | 6/27/2034 | |
| Restricted stock/RSUs | Unvested | 6,124 | — | Time‑vest (ratable) | Market value $1,335,644 at FY2025 YE |
| FY2026 PSU (target) | Unvested | — | — | 12/31/2028 | $825,000 target value; operating margin improvement PSU |
Context on potential selling pressure: The closing price on Aug 4, 2025 was $217.49 vs key option strikes of $259.85 and $292.13, indicating these tranches were out‑of‑the‑money at that date, reducing near‑term exercise/sale incentives; PSUs cliff‑vest in 2028 .
Employment Terms
- No individual employment agreement; at‑will employment .
- Change‑of‑control (CIC) equity: Options become exercisable; restricted stock/RSUs either cash‑out at highest price or restrictions lapse (single‑trigger treatment under stock plans) with 280G cutback to avoid excise tax .
- Management Retention Agreement (MRA): Upon CIC, a two‑year employment period is established; if a qualifying termination occurs (not for cause, disability, death, or for good reason), cash severance equals 2x highest base salary + 2x target annual incentive, payable ~6 months post‑termination, plus 18 months of continued medical/dental/vision; one‑year non‑compete post‑termination; payments reduced to avoid 280G excise tax .
- Severance limits policy: No severance >2.99x salary + target AIC (including accelerated equity valued under 280G) absent stockholder approval .
- Clawbacks: Mandatory recoupment of erroneously awarded incentive‑based comp after “Big R” or “little r” restatements (no fault standard); additional discretionary clawback for fraud or willful misconduct causing reputational/financial harm .
Pension, Deferred and Perquisites
- Pension/Parity Plan: Not eligible for Pension Plan; began Parity Plan participation August 1, 2024; FY2025 present value of accumulated Parity Plan benefit $214,426 .
- Perquisites and other benefits (aggregate incremental cost to FedEx):
- FY2025: Personal aircraft use $33,889; security $19,491; financial counseling $12,000; umbrella insurance $7,215; total $72,595 .
- FY2024: Personal aircraft use $44,232; security $23,030; umbrella insurance $4,008; relocation-related tax reimbursements $41,509; total $147,037; separate tax payments for restricted stock $638,019 and business‑related aircraft $11,381 .
Performance & Track Record
- FY2025 incentive outcomes: Company adjusted consolidated operating income below target (actual $6,120mm vs $7,245mm target) drove below‑target AIC for executives including Dietrich; LTI outcomes for FY23–FY25 were below target overall (EPS growth below threshold; relative TSR below target), though CapEx/Revenue achieved maximum .
- Strategy and execution commentary: “Our team continues to make strong progress on reducing our cost to serve and improving our operational performance… Despite [macro] uncertainty, I'm confident we are well positioned to execute on our transformation initiatives and create stockholder value,” — John W. Dietrich, CFO (Mar 20, 2025) .
- Context: FY2026 AIC and the 2028 PSU construct directly tether pay outcomes to operating income, cost reduction delivery (DRIVE/Network 2.0), service performance, and multi‑year operating margin expansion .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay approval: 90.6% support at the 2024 annual meeting, indicating broad investor endorsement of the compensation program structure .
Compensation Structure Analysis
- Mix and risk: High share of variable/at‑risk pay (AIC + LTI + options/PSUs); LTI includes performance conditions (EPS, TSR, margin improvement) and stock options requiring appreciation (key FY2025 grant strike $292.13 vs $217.49 close at 8/4/25) .
- Metric tightening: FY2026 AIC adds operational levers (DRIVE/Network 2.0 savings and on‑time performance) alongside operating income, sharpening operational accountability .
- One‑time PSUs: 2028 cliff vest tied to 100–400+ bps operating margin improvement aligns retention and multiyear value creation; increases risk if transformation underdelivers .
- No tax gross‑ups: Company describes tax payments related to restricted stock as preventing forced sales rather than conventional gross‑ups .
Risk Indicators & Red Flags
- Hedging/pledging prohibited; no pledges disclosed for Dietrich .
- Related‑party transactions: None disclosed for Dietrich at appointment (Reg S‑K 404) .
- Clawback coverage broad (mandatory and discretionary) .
- Severance capped by policy (2.99x) and 280G cutback .
Investment Implications
- Alignment: Below‑target FY2025 payouts and OTM options indicate real downside to missing targets; FY2026 AIC and 2028 PSUs tightly link pay to operating income, cost take‑out, service quality, and margin expansion—key drivers of multiple and FCF .
- Retention risk: No individual contract but strong post‑CIC protection via MRAs and 2028 PSU cliff vest support retention through separation of FedEx Freight and transformation milestones; one‑year non‑compete mitigates competitive leakage on exit .
- Selling pressure: With major option tranches at $259.85/$292.13 and stock at $217.49 on 8/4/25, near‑term option exercises look unlikely; unvested RSUs (6,124) and PSUs vest on schedules that defer supply until performance met and time served .
- Governance quality: Strong clawbacks, hedging/pledging bans, ownership guidelines (3x salary), and high say‑on‑pay support (90.6%) reduce governance risk around compensation .