FedEx Corp. announced on Monday that Fred Smith will step down on June 1 as CEO of the package delivery company he founded and will be succeeded by the company’s president and chief operating officer.
Raj Subramaniam will serve as both CEO and chairman and Smith will become executive chairman, the parcel delivery company said.
Smith, 77, started FedEx in 1973, delivering small packages and documents faster than the post office could. Over the next half-century, he oversaw the growth of a business that combined air and ground services and became something of an economic indicator because of its service to other businesses.
“FedEx has changed the world by connecting people and possibilities over the past 50 years,” Smith said in a statement that also praised Subramaniam’s ability to guide the business. Smith said he will focus on global issues including sustainability, innovation and public policy.
Subramaniam, 56, joined the company in 1991 and has held several marketing and management positions in Asia and the United States. He became director of marketing and communications and also served as general manager of FedEx Express. He became president and chief operating officer in 2019 and joined FedEx’s board of directors the following year. He will remain a director.
Smith said that for the past few years he had recommended to FedEx directors that if he died or became disabled, they should appoint Subramaniam’s CEO and appoint an independent chairman. On Monday, the board named a current director, Brad Martin, as vice-chairman and Smith’s designated successor as chairman.
Smith broke the news to FedEx employees in a memo tracing some of the Memphis, Tennessee-based company’s history. FedEx started with 14 planes and 389 crew members, delivering 186 packages on the first day of operations.
“We were a small startup and had our share of doubters,” Smith said. He boasted that the company had become a “global connector of people and possibilities that would change our world for the better”.
FedEx and rival United Parcel Service have benefited in recent years from the boom in online shopping, which means its drivers are delivering more packages to customers’ doorsteps. In 2019, as Amazon.com expanded its own delivery business, FedEx dropped a contract to provide express delivery to the retail giant and stopped ground deliveries for Amazon soon after.
FedEx has been hit by the trade war with China, and Smith has frequently used forums such as the quarterly earnings call to protest the tariffs, making him one of the few CEOs of a major U.S. company to take issue. the trade policies of then-President Donald Trump.
The company earned US$5.2 billion on revenue of US$84 billion in its last full fiscal year, which ended May 31.
Smith and a company bearing his name own more than 19.2 million shares, according to FactSet. They are worth more than US$4.4 billion at Monday’s closing price.
FedEx shares rose about 2% in after-hours trading.