NEW YORK -- The founder and top executive at FedEx Corp. received a pay package worth $13.7 million in the most recent fiscal year, nearly double a year earlier.
That hike for CEO and Chairman Frederick W. Smith was due to the addition of long-term incentive pay, which rewards the company's top brass for meeting certain earnings thresholds over a three-year period. It was the first time in four years that FedEx executives got long-term incentive pay. The company said significant earnings per share growth since the recession resulted in executives collecting maximum payments in fiscal 2012, which ended in May. Full-year earnings per share jumped 70 percent from fiscal 2010 to 2012.
The rest of the payout to Smith rose only slightly from a year ago. The 68-year old executive, who started FedEx in 1971, took home a $1.3 million salary in the year that ended in May, a 2 percent increase from the year before. Smith didn't receive any new stock awards, but the value of his option awards rose 3 percent to $5.4 million.
A performance-based cash bonus, which incorporates Smith's annual and long-term incentive pay, soared to more almost $6.6 million from $375,000 in fiscal 2011. About $5.3 million of that was the reward for long-term performance.
The value of Smith's perks, which included everything from a company retirement plan contribution to use of corporate jets, rose 10 percent to $470,971.
While FedEx's earnings have accelerated rapidly since the recession, the world's second-largest package delivery has indicated recently that it's not immune to global economic conditions.
In June it warned that the world's slowing economies will crimp its earnings through next year. It has trimmed its fleet of airplanes and offered thousands of workers buyouts to counter a falloff in demand. The Memphis, Tenn., company's forecast for the fiscal first quarter fell below Wall Street's expectations, while its range for the year was below most analysts' views.
FedEx is closely watched for signs about the health of the economy, because of the millions of packages it delivers every day. It forecast only moderate growth for both the U.S. and the world economies, citing the debt crisis in Europe and a slowdown in Asia.
FedEx's larger competitor, Atlanta-based United Parcel Service Inc., also cited slowing Asian shipments as it reported lower-than-expected first-quarter results in late April. Much of UPS' profit growth came from its core U.S. business, where revenue was up on higher volume and prices. That was offset by a shift toward lighter packages and slower shipping methods.
The AP calculation of executive pay packages is based on a filing with the Securities and Exchange Commission. It aims to isolate the value company boards place on CEO's total compensation package. It includes salary, bonus, incentives, perks and the estimated value of stock options and awards.