For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.
Benefits December 18, 2008
FedEx Suspends Match, Cuts Pay
December 18, 2008 (PLANSPONSOR.com) - In a statement
of its fiscal year second quarter earnings results FedEx
Corp. said it will suspend 401(k) match contributions and
reduce salaries of exempt and senior executive personnel in
an effort to reduce costs.
Reported by Rebecca Moore
According to the statement, match contributions to FedEx’s 401(k) plan will be suspended for a minimum of one year, starting February 1, 2009.
The company also announced a 20% decrease in CEO Frederick W. Smith’s pay; a 7.5% – 10% reduction in pay for other senior FedEx executives; and a 5% pay cut, as well as elimination of merit-based salary increases, for remaining U.S. salaried exempt personnel in calendar year 2009.
The statement said FedEx has already taken actions to reduce over $1 billion of expenses for all of fiscal 2009, including elimination of variable compensation payouts, a hiring freeze, volume-related reductions in labor hours and line-haul expenses, discretionary spending cuts, and personnel reductions at FedEx Freight and FedEx Office. The new actions are expected to reduce expenses by $200 million during the remainder of fiscal 2009 and approximately $600 million in fiscal 2010.
“Our financial performance is increasingly being challenged by some of the worst economic conditions in the company’s 35-year operating history,” said Smith, in the statement.