Executive Summary
FedEx Corporation‘s September 29, 2025 annual meeting voting results reflect growing shareholder concerns about the company’s persistent underperformance and governance structure. While all management-backed proposals passed, the weak 63.3% say-on-pay approval and notable director opposition signal frustration with value creation and accountability mechanisms.
With a risk score of 78 placing FedEx at the 97th percentile for activist vulnerability among large industrials, and total shareholder returns significantly trailing both the S&P 500 and key competitors, the company faces intensifying pressure from its investor base. The 2022 D.E. Shaw campaign, which resulted in Amy Lane’s board appointment, appears to have been insufficient to catalyze the operational transformation needed to close the performance gap with peers.
These voting results suggest FedEx may face renewed activist attention, particularly given the addition of company insider Richard W. Smith to the board and the continued presence of long-tenured directors who have overseen extended periods of underperformance.
Understanding the Performance Context
Total Shareholder Return Challenges
FedEx’s recent shareholder returns present a concerning picture when compared to broader market performance:
- 1-year: -7% vs. S&P 500 +18% (25 percentage point underperformance)
- 3-year: 20% vs. S&P 500 23% (3 percentage point underperformance)
- 5-year: 1% vs. S&P 500 15% (14 percentage point underperformance)
These results indicate that long-term FedEx shareholders have experienced minimal returns while the broader market has delivered substantial gains. The one-year performance is particularly disappointing, with shareholders experiencing negative returns during a period of strong market appreciation.
Peer and Risk Profile Comparison
FedEx’s risk score of 78 ranks it at the 97th percentile among large industrials for activist vulnerability. For context, key competitor UPS holds a risk score of 79 (98th percentile), suggesting both major package delivery companies face elevated governance and performance scrutiny from the investment community.
Among large industrial companies, FedEx’s position reflects ongoing concerns about operational execution, strategic direction, and board oversight during a critical transformation period.
Board Elections: Notable Variations in Support
All thirteen director nominees were elected to serve until the 2026 annual meeting, though voting patterns reveal meaningful disparities in shareholder confidence:
Strong Support:
- Amy B. Lane: 99.6% approval (185.1 million for vs. 744,419 against)
- Nancy A. Norton: 99.7% approval (185.3 million for vs. 563,238 against)
- Frederick P. Perpall: 99.2% approval (184.2 million for vs. 1.5 million against)
Notable Opposition:
- Richard W. Smith: 89.8% approval (166.9 million for vs. 18.9 million against)
- Paul S. Walsh (Chair of the Compensation and Human Resources Committee): 94.3% approval (175.4 million for vs. 10.5 million against)
The Richard W. Smith Question
The most notable result was Richard W. Smith’s 89.8% approval rate, which translates to 10.2% shareholder opposition—substantially higher than other directors. Smith’s first election to the board raises questions given that he is a company insider rather than an independent director.
At 47 years old with no prior FedEx board tenure, Smith’s addition represents a departure from the typical profile of board additions following periods of underperformance, when companies should be seeking proven independent directors with fresh perspectives. The relatively lower approval suggests institutional investors may have concerns about board composition and independence at a time when enhanced oversight could be beneficial.
The D.E. Shaw Precedent
In 2022, activist investor D.E. Shaw engaged with FedEx, ultimately securing Amy Lane’s appointment to the board. While Lane has received strong shareholder support (99.6% in this election), the company’s continued underperformance suggests that adding one activist-backed director to a board with substantial incumbent tenure has not been sufficient to catalyze transformational change.
This raises questions about whether more comprehensive board refreshment might be necessary to align director composition with the urgency of operational and strategic challenges facing the company.
Say-on-Pay: A Concerning Signal
The advisory vote on executive compensation passed with 63.3% approval (117.8 million for vs. 67.9 million against), representing 36.5% shareholder opposition. This level of dissent is notable and typically prompts boards to undertake comprehensive reviews of compensation practices.
Understanding the Vote
A say-on-pay approval rate below 70% is generally viewed as a failed vote in practical terms, even though the proposal technically passed. The 36.5% opposition rate suggests significant institutional investor concern about:
- Pay-for-Performance Alignment: Whether executive compensation appropriately reflects company performance, particularly given the disappointing total shareholder returns
- Compensation Structure: The mix of fixed versus performance-based compensation and the rigor of performance metrics
- Peer Benchmarking: How FedEx’s executive pay levels compare to competitors and relative performance
The Accountability Question
While say-on-pay votes provide a mechanism for shareholders to express compensation concerns, they are advisory and non-binding. This limitation means that even significant opposition (36.5%) doesn’t directly remove compensation committee members or mandate specific changes to pay programs.
The more direct accountability mechanism—voting against directors—showed different results, with all directors receiving between 89.8% and 99.7% approval. This disconnect raises questions about whether shareholders are effectively connecting compensation concerns with director accountability, particularly for compensation committee members. While Paul Walsh, the chair of the Compensation and Human Resources committee did receive lower support from shareholders, a 94% FOR result is a result that will have no impact.
Equity Incentive Plan: Strong Approval Despite Pay Concerns
Shareholders approved an amendment to the Stock Incentive Plan with 93.1% support (173.2 million for vs. 12.6 million against), authorizing an additional 2.1 million shares for issuance, including 2 million that may be issued as full-value awards.
The overwhelming approval contrasts with the weaker say-on-pay result, suggesting shareholders support equity-based compensation in principle while expressing concerns about current compensation program design and outcomes. The 6.7% opposition, while modest, is somewhat elevated for equity plan amendments, which typically receive near-unanimous approval.
This vote indicates that shareholders view equity incentives as appropriate tools for aligning management interests with long-term value creation, but expect rigorous performance requirements and meaningful accountability for results.
Independent Board Chairman Proposal: A Meaningful Signal
A shareholder proposal calling for an independent board chairman was defeated with 57.3% voting against (106.7 million against vs. 79 million for). However, the 42.5% support level deserves careful consideration, particularly given the proposal’s sponsor.
John Chevedden: Understanding the Context
The proposal was submitted by John Chevedden, one of the most prolific individual shareholder activists in corporate America. Since the 1990s, Chevedden has filed hundreds of governance proposals, with an average of 41% shareholder support—remarkably high for individual activists. He utilizes SEC Rule 14a-8, which allows any individual owning at least $2,000 in stock to propose shareholder resolutions.
Chevedden typically owns minimal stakes in the companies he targets and files dozens of proposals annually across a wide range of companies. While his proposals often receive modest support, those that achieve above-average backing tend to reflect genuine institutional investor concerns about governance practices.
Why This Vote Matters
The 42.5% support for Chevedden’s independent chairman proposal at FedEx is notable because it suggests this governance issue resonates with institutional investors.
R. Brad Martin serves as non-executive Chairman of the Board, a position separate from CEO Rajesh Subramaniam’s role. The substantial minority support for requiring an independent chairman suggests that a meaningful portion of the shareholder base believes that putting in additional board independence measures could strengthen oversight and governance. Richard Smith’s nomination could have added fuel to the fire for those concerned about these issues.
Implications and Forward-Looking Considerations
Activist Vulnerability Assessment
FedEx’s combination of elevated activist risk scores, persistent underperformance relative to markets and peers, and mixed shareholder voting results suggests the company may face renewed activist attention. Several factors contribute to this vulnerability:
- Clear Performance Gap: The substantial TSR underperformance creates a compelling narrative for activists arguing that operational or strategic changes could unlock shareholder value
- Board Composition Questions: The addition of a company insider (Richard W. Smith) receiving lower support, combined with long-tenured directors overseeing extended underperformance periods, may prompt calls for board refreshment
- Governance Concerns: The 42.5% support for an independent chairman proposal indicates meaningful shareholder interest in enhanced board independence
- Precedent of Responsiveness: The 2022 D.E. Shaw campaign demonstrated that FedEx’s board will engage with activists, potentially encouraging future campaigns
Near-Term Priorities
To address shareholder concerns reflected in these voting results, FedEx’s board faces several priorities:
Compensation Review: The Compensation Committee should engage directly with top institutional shareholders to understand specific pay concerns and develop responsive adjustments for the 2026 compensation program.
Deliver for Shareholders: Given the disappointing TSR results, management and the board need to ensure the current strategy delivers on the promises tied to the DRIVE transformation program and that shareholder returns improve in kind.
Governance Evaluation: With 42.5% support for an independent chairman proposal, the board should evaluate whether voluntary governance enhancements could address shareholder concerns about independence and oversight.
Board Composition Strategy: The mixed support levels for directors, particularly the notable opposition to Richard W. Smith, suggest the board should carefully consider its composition strategy, including the balance of independence, operational expertise, and tenure.
Conclusion
The 2025 FedEx annual meeting voting results reflect a shareholder base expressing measured but meaningful concerns about performance, compensation alignment, and governance practices. While all proposals ultimately aligned with management recommendations, the weak say-on-pay approval, notable director opposition, and substantial independent chairman proposal support indicate that shareholders are closely scrutinizing the board’s stewardship during this critical transformation period.
For CEO Rajesh Subramaniam and the board, these results represent both a challenge and an opportunity. The challenge is clear: FedEx must demonstrate that the DRIVE transformation program can deliver improved operational performance and shareholder returns that close the gap with the S&P 500 and key competitors. The opportunity lies in proactively addressing governance and compensation concerns before they escalate into more significant shareholder activism.
The next twelve months will be important in determining whether FedEx can execute its transformation strategy while maintaining shareholder confidence, or whether the company will face more intensive activist engagement seeking to accelerate change. The 2022 D.E. Shaw campaign added valuable board perspective through Amy Lane, but the continued underperformance suggests that more comprehensive changes—whether board-initiated or activist-driven—may be necessary to create the shareholder value that has proven elusive in recent years.
Shareholders, board members, and management all share an interest in seeing FedEx succeed in its transformation. These voting results should serve as an important signal that patience, while not exhausted, is not unlimited, and that clear progress toward improved performance will be essential to maintaining stakeholder confidence.
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