FedEx CFO Gets $575K Bonus During COVID

FedEx's chief financial officer received a $575,000 bonus last week for his work during the COVID-19 pandemic, amid a stretch of belt-tightening for FedEx as it grapples with the coronavirus' financial sting.

CFO Alan Graf Jr. received the discretionary cash bonus in recognition of his "outstanding leadership during the COVID-19 pandemic," according to FedEx's annual financial report. The compensation committee of FedEx's board of directors approved the payment Friday after Chairman and CEO Fred Smith's recommendation.

"Alan Graf's role in solidifying our company's financial stability during a global health crisis for the long term benefit of our team members and customers ranks among his greatest achievements in his decades of financial leadership at FedEx," the company said in a statement Tuesday.

FedEx's financial performance beat Wall Street's tepid expectations in its most recently reported quarter, as home delivery volume surged and flight demand jumped in some international lanes.

The effects of COVID-19 still put a dent in its earnings, though – commercial package volume fell and the company said the economy's future is too uncertain to provide an earnings forecast.

"We will continue managing network capacity, flexing our networks and adjusting as needed to align with volumes and operating conditions," Graf said in June's earnings call. "However, some of the higher operating costs related to the pandemic that we experienced in the fiscal fourth quarter will persist in fiscal 2021."

Graf, who is also an executive vice president at FedEx, is retiring at the end of the year. He is stepping down as CFO on Sept. 22, succeeded by Mike Lenz.

"In his 40 years at FedEx, Alan has helped build and transform this company," Smith said in a statement when Graf's retirement was announced. "He has been part of every significant decision and helped navigate tremendous growth, strategic investments, international acquisitions and global challenges. FedEx would not be the $69 billion globally admired corporation we are today without his leadership."

Graf's total executive compensation was $6.51 million in fiscal year 2018 and $5.34 million in fiscal 2019.

FedEx makes financial maneuvers to mitigate COVID-19

In response to the coronavirus' adverse effects, the company has restricted hiring, furloughed some employees and plans to spend $1 billion less on capital expenditures during fiscal year 2021. The company also said it borrowed $1.5 billion to help its financial flexibility.

"We have reduced our planned capital spending where possible and have taken actions to mitigate the impact of the pandemic," Graf said.

FedEx also eliminated its annual incentive bonus for executives this fiscal year. The company said in a regulatory filing it was due to "the current economic and business uncertainty resulting from the COVID-19 pandemic." Other executive perks, such as restricted FedEx stock grants and a long-term incentive bonus, are still active.

COVID-19's effects have been more than financial for FedEx. The company has seen several coronavirus cases and deaths among its employees.

Max Garland covers FedEx, logistics and health care for The Commercial Appeal. Reach him at max.garland@commercialappeal.com or 901-529-2651 and on Twitter @MaxGarlandTypes.