FedEx Corporation (NYSE:FDX) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02.
Exclusion of Certain Items for AIC and LTI Plans. On May31, 2018, the Board of Directors of FedEx Corporation (the “Board”), upon the recommendation of its Compensation Committee, approved the exclusion of certain items from fiscal 2018 earnings for purposes of FedEx’s fiscal 2018 annual incentive compensation plan (the “2018 AIC Plan”) and FedEx’s FY2016–FY2018, FY2017–FY2019 and FY2018–FY2020 long-term incentive plans (collectively, the “Active LTI Plans”). The Board approved the following exclusions from the 2018 AIC Plan and Active LTI Plans, as applicable: (i)expenses in connection with certain pending U.S. Customs Border and Protection matters involving FedEx Trade Networks; (ii)the cost of accelerated 2018 annual pay increases for certain hourly team members to April 2018 from October 2018, following the passage of the Tax Cuts and Jobs Act of 2017 (the “TCJA”); (iii)goodwill and other asset impairment charges at FedEx Supply Chain; and (iv)the provisional benefit from the remeasurement of the Corporation’s net U.S. deferred tax liability following the passage of the TCJA. As previously disclosed, the Board has also approved the exclusion of the mark-to-market pension accounting adjustments (which includes the one-time pension settlement charge related to the previously announced transfer of approximately $6 billion of the Corporation’s tax-qualified U.S. domestic pension plan obligations to Metropolitan Life Insurance Company) and TNT Express integration and restructuring costs from fiscal 2018 earnings for purposes of the 2018 AIC Plan and the Active LTI Plans. By excluding these items, payouts, if any, under these plans will more accurately reflect FedEx’s core financial performance in fiscal 2018.
Modification to AIC Plan Target Objective. As adopted, the adjusted consolidated operating income target objective under the 2018 AIC Plan was the same as the fiscal 2018 business plan objective for adjusted consolidated operating income (excluding, in each case, fiscal 2018 TNT Express integration and restructuring costs and the mark-to-market pension accounting adjustments). On May31, 2018, the Board, upon the recommendation of the Compensation Committee, approved a modification to the target objective under the 2018 AIC Plan so that the target objective is lower than the corresponding business plan objective for adjusted consolidated operating income. This action, among other things, minimizes the financial impact of the NotPetya cyberattack for all participants in the plan.
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About FedEx Corporation (NYSE:FDX)
FedEx Corporation (FedEx) provides a portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand. The Company’s segments include FedEx Express, TNT Express, FedEx Ground, FedEx Freight and FedEx Services. The FedEx Express segment offers a range of the United States domestic and international shipping services for delivery of packages and freight. TNT Express segment collects, transports and delivers documents, parcels and freight on a day-definite or time-definite basis. The FedEx Ground segment provides business and residential money-back guaranteed ground package delivery services. The FedEx Freight segment offers less-than-truckload (LTL) freight services. The FedEx Services segment provides its other companies with sales, marketing, information technology, communications, customer service and other back-office support.