IBT Pushes Change at FedEx Shareholders Meeting

A Teamster shareholder proposal calling for increased accountability for the board of directors of FedEx was defeated at the shareholders meeting, but the union will return in the future to get this important reform approved.

The union proposed the reform at the company's shareholders' meeting in September 2005. The proposal sought to amend the company's governance documents to provide that director nominees be elected by a majority of votes cast by shareholders. The proposal called for the board to adopt a majority standard for election of directors rather than the plurality standard that it currently follows. Currently, a nominee to the FedEx board can be elected or re-elected with a single affirmative vote, even if a substantial majority of the votes cast are withheld from the director nominee.

"We will be back in the future to ask FedEx shareholders to approve this reform," said C. Thomas Keegel, Teamsters General Secretary-Treasurer. "While a majority of shareholders did not vote for the reform this time, we will not give up."

Similar shareholder proposals to the one filed by the Teamsters at FedEx have been sponsored at a number of companies this year. Of these proposals, 16 have received a majority vote from shareholders, including ones at Office Depot, Marathon Oil and NiSource.

In September 2003, a Teamster shareholder proposal to declassify the FedEx board of directors garnered overwhelming support at the company's annual meeting. With more than twice as many shareholders voting in favor of the proposal than against it, the company was sent a strong message in favor of corporate governance reform.

The proposal called for the board to adopt annual elections for all directors, replacing the company's former practice of board members serving staggered terms and facing election by shareholders only every three years.

Despite the opposition of FedEx Chairman Fred Smith and its board of directors, shareholders agreed that the election process of the board needed a fundamental reform.  Following the passage of the proposal, FedEx adopted the Teamster-sponsored changes.

"It's no more business as usual at FedEx," Keegel said after the victory two years ago.

"The shareholder proposals are part of a continuing effort that supports our drive to change FedEx and its corporate governance and practices," said Ken Hall, Director of the Teamsters Parcel and Small Package Division. "Our organizing campaign is under way at DHL, and we will organize at FedEx as well."