Rajesh Subramaniam

About Rajesh Subramaniam

Rajesh Subramaniam is President and Chief Executive Officer of FedEx Corporation and a director since 2020; he is 59 and has over 30 years of FedEx experience across operations, marketing, and international leadership, including roles in Asia-Pacific and Canada . Under his tenure, FedEx’s pay-versus-performance disclosures show cumulative TSR index values of 174.03 (FY2023), 208.06 (FY2024), and 182.43 (FY2025) versus the Dow Jones Transportation Average of 159.13, 179.57, and 175.85, respectively, and adjusted consolidated operating income of $4,948 million (FY2023), $6,235 million (FY2024), and $6,120 million (FY2025) . He leads transformation initiatives including Network 2.0 and “one FedEx,” and serves in external policy and business forums (U.S.-China Business Council Chair; U.S.-India forums; Business Roundtable) .

Past Roles

External Roles

Fixed Compensation

Key elements and updates:

• Base salary increased 3.4% to $1,500,000 effective Oct 1, 2024; further increased 5% to $1,575,000 effective Oct 1, 2025 .
• As an employee-director, he received no additional director compensation for Board service .

Multi-year compensation (Summary Compensation Table):

Performance Compensation

Annual Incentive Compensation (AIC) – FY2025 design and outcome:

• Target AIC for CEO set at 185% of base salary; maximum payout is 150% of target .
• FY2025 corporate metric: adjusted consolidated operating income; threshold $6,077mm, target $7,245mm, max $7,332mm; actual $6,120mm → below target .
• CEO FY2025 AIC actual payout: $672,321 .

Long-Term Incentives (LTI) – Structure and outcomes:

• FY23–FY25 LTI weights: Adjusted EPS (50%), CapEx/Revenue (25%), Relative TSR vs S&P 500 (25%) .
• EPS component used a 3-year aggregate adjusted EPS baseline of $20.61; actual aggregate adjusted EPS was $49.88 for the period, below threshold goal of $68.22 → below-threshold EPS payout .
• CapEx/Revenue achieved 5.8% (≤6.6% maximum objective) → maximum payout on this component .
• Relative TSR below target; FedEx 3-year TSR at 31st percentile of S&P 500 → below-target TSR payout .
• CEO FY23–FY25 LTI cash payout: $2,750,000 (target $5,500,000) .

Equity grants and terms:

• FY2025 equity awards: 34,485 stock options (exercise price $292.13) and 7,709 restricted shares; annual grant date June 27, 2024 .
• Options and restricted stock generally vest ratably over four years beginning on first anniversary of grant .

Equity Ownership & Alignment

Ownership, guidelines, and alignment mechanisms:

• Beneficial ownership: 123,908 common shares; options exercisable within 60 days: 248,559; percent of class: <1% .
• Unvested restricted stock at FY2025 year-end: 20,919 shares (market value $4,562,434 at $218.10) .
• Executive stock ownership goal: 6x base salary for CEO; unvested restricted stock counts; as of Aug 4, 2025, each executive officer exceeded or was within five-year compliance period .
• Hedging and pledging prohibited; exceptions historically granted only to founder; no current executive officer or Board member holds pledged FedEx securities .

Employment Terms

• Management Retention Agreement (MRA) – change-in-control: Double-trigger benefits; lump sum equal to 2x highest annual base salary (12 months pre-termination) + 2x target annual incentive; 18 months medical/dental/vision; benefits reduced to avoid excise tax under 280G .
• Equity treatment on change-in-control: service-based options/SARs vest and become immediately exercisable; service-based restricted shares/RSUs either cash-out at highest deal price or vest; performance awards paid at 100% of target .
• Retirement/death/disability: retirement at/after age 60 accelerates vesting of restricted shares; death or permanent disability accelerates vesting of service-based equity; options exercisable for defined periods .
• Clawbacks: Dodd-Frank Section 10D-compliant recoupment for Big R/little r restatements; separate misconduct clawback at Compensation & HR Committee discretion for fraud/willful misconduct causing reputational or financial harm .
• Perquisites/security/aircraft: CEO required to use corporate aircraft for all travel; security services and equipment provided based on bona fide business-related security concerns; tax payments made for restricted stock awards are embedded in grant value (not conventional gross-up) .

Board Governance

• Board service: Director since 2020; not independent (as CEO); no Board committees; other public company directorship at The Procter & Gamble Company .
• Independence framework: All committee members are independent; when Chairman is not independent, Lead Independent Director presides and has defined authorities (agenda approval, liaison, stockholder communications) .
• Current leadership: R. Brad Martin to become executive Chairman (not independent) if reelected; Susan P. Griffith designated to become Lead Independent Director; committees reconstituted accordingly .
• Board processes: Majority voting with resignation policy; annual elections; executive sessions of independent directors; average Board/committee attendance in FY2025 was 96% .

Director Compensation (as applicable)

• Employee directors (e.g., CEO) receive no additional compensation for Board service .
• Outside director program: annual retainer $140,000, RSUs target $195,000 with 1-year vest; leadership and chair fees; election to take retainer in stock available .

Performance & Track Record

• Pay-versus-Performance: CEO “compensation actually paid” (CAP) vs performance metrics—FY2023: CAP $12.80mm; FY2024: CAP $15.91mm; FY2025: CAP $7.27mm; cumulative TSR index values of 174.03, 208.06, and 182.43 for FY2023–FY2025, respectively; adjusted consolidated operating income $4,948mm (FY2023), $6,235mm (FY2024), $6,120mm (FY2025) .
• AIC and LTI results reflect below-target outcomes in FY2025 due to EPS declines in FY2023 and mixed demand/yield dynamics; CapEx/Revenue performance achieved maximum payout component, aligning with capital efficiency priorities .
• Strategic initiatives: DRIVE, Network 2.0, Tricolor and digital innovations highlighted by Board as central to transformation and competitiveness .

Compensation Structure Analysis

• Cash vs equity mix: CEO target total direct compensation (TDC) 71% variable, emphasizing at-risk components (AIC, LTI, options, restricted stock) .
• Metric evolution: ROIC incorporated into active LTI plans (FY24–FY26 onward) replacing CapEx/Revenue to further align with shareholder value; relative TSR retained at 25% weight .
• Dilution and plan controls: 2019 Plan prohibits option repricing and discounted options; minimum vesting and clawbacks; estimated equity program dilution on fully diluted basis ~9.6% after share increase proposal .

Related Party Transactions and Red Flags

• Related persons: Mr. Subramaniam’s brother employed at Federal Express; individual annual compensation did not exceed $388,000; reviewed under related person policy .
• Hedging/pledging: Prohibited; exceptions only historically for founder; no current pledges by executives .
• Say-on-Pay: 2024 approval at 90.6% of votes cast; Board recommends “FOR” NEO compensation in 2025 .

Financial Performance Summary

*Values retrieved from S&P Global.

Investment Implications

• Pay-for-performance alignment is credible: below-target AIC and LTI payouts in FY2025 reflect tough EPS comps and yield mix, while maximum CapEx/Revenue/ROIC components signal discipline on capital efficiency .
• Governance structure mitigates dual-role risks: CEO is not Chairman; with an executive Chairman, the Lead Independent Director’s enhanced role, independent committees, and majority voting support oversight and independence .
• Ownership alignment is strong: CEO meets/exceeds 6x salary ownership goal, holds meaningful vested/unvested equity, and is subject to robust clawbacks and anti-hedging/pledging policies .
• Trading signals: Near-term insider selling pressure appears limited given four-year vesting schedules and lack of pledging; however, option strike ($292.13) versus recent price ($217.49 at Aug 4, 2025) indicates options are out-of-the-money, reducing exercise-related supply near term .