Good morning, ladies and gentlemen. Welcome to the annual stockholders meeting of FedEx Corporation. By this official chronometer up here, it's 8:00 A.M. on Monday, 28 September 2015. I'm Frederick Wallace Smith, Chairman of the Board and Chief Executive Officer of FedEx Corporation. We appreciate the interest of the stockholders who have come to the meeting, and we thank you for being here. This meeting is being webcast live. I would also like to welcome our stockholders who have joined us via that webcast. I'll begin by introducing the other members of our Board of Directors. As I call their name, each one of them will stand up to be recognized. Jim Barksdale, John Edwardson, Marvin Ellison, Kim Jabal, Shirley Jackson, Gary Loveman, Brad Martin, Joshua Ramo, Susan Schwab, David Steiner, and Paul Walsh.
Joining me on the stage are Christine Richards, our Executive Vice President, General Counsel, and Corporate Secretary, who will act as Secretary of the meeting, and John Ruocco, Assistant Vice President, Senior Relationship Manager of Computershare Trust Company, our transfer agent, who has been appointed and duly sworn as Inspector of Election. Representatives of Ernst & Young are also present and available to answer appropriate questions that you may have of them as auditors of the company's fiscal year 2015 financial statements. As each of you entered the meeting room this morning, you were given a copy of the agenda and the annual meeting guidelines. The meeting will be conducted in accordance with the agenda and the guidelines. If you've not received copies of the agenda and guidelines, please raise your hand, and copies will be brought to you. I'll now call the meeting to order. Ms.
Richards will report on the giving of notice of the meeting and the presence of a quorum.
Mr. Chairman, I have a complete list of the holders of record of the company's common stock at the close of business on 3 August , 2015, who are entitled to vote at this meeting. The list is arranged in alphabetical order and indicates the number of shares held by each stockholder. It was prepared and certified by Computershare Trust Company, the company's transfer agent for the common stock. I have also received an affidavit of a representative of Computershare, which states that on 17 August , 2015, the notice of annual meeting, the proxy statement, the proxy, the 2015 annual report, and a postage prepaid return envelope were mailed to the shareholders of record as of 3 August , 2015.
A tabulation of the proxies received from shareholders indicates that a majority of the shares outstanding on the record date are represented at this meeting, and a quorum is present.
Thank you, Ms. Richards. A copy of the affidavit will be filed with the records of this meeting. The polls for each proposal are now open at 8:03 A.M. Central Time, 28 September , 2015. The proposals to be considered today are listed on the agenda and in the proxy materials previously distributed. If you've already submitted your proxy, your shares will be voted accordingly. If there is any stockholder present who has not yet voted and wishes to do so, please hold up your hand so we may distribute ballots. If you have previously voted by proxy, please do not fill out a ballot unless you wish to change your proxy vote. Anybody need a ballot? There's one in the back. For those voting by ballot, please mark your choices for each item of business and return the ballot to a FedEx representative when you are finished.
If you're a beneficial owner with a legal proxy, please return the legal proxy with your ballot. The audience will have the opportunity to ask any questions related to these proposals after all of the proposals have been presented. Please defer any questions or comments relating to the proposals until such time. If you have any questions that are not directly related to the proposals, you'll have the opportunity to ask them at the conclusion of the meeting. The first matter to be taken up is the election of directors. 12 directors are to be elected today. A nominee will be elected to the board of directors if the number of votes cast for such nominee's election exceeds the number of votes cast against such nominee's election.
If elected, each nominee will serve as a director until the 2016 annual meeting and until his or her successor is duly elected and qualified. The nominees are as follows: James L. Barksdale, John A. Edwardson, Marvin R. Ellison, Kimberly A. Jabal, Shirley Ann Jackson, Gary W. Loveman, R. Brad Martin, Joshua Cooper Ramo, Susan C. Schwab, Frederick W. Smith, David P. Steiner, and Paul S. Walsh. The next item of business is the proposal to approve, on a non-binding basis, an advisory resolution on named executive officer compensation as follows.... Resolve that the compensation paid to FedEx's named executive officers, as disclosed in the company's proxy statement for the 2015 annual meeting of stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the accompanying compensation tables, and the related narrative discussion, is hereby approved.
The next item of business is the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm of the company for the fiscal year ending 31 May, 2016. The fourth item of business is the consideration of a stockholder proposal regarding an independent board chairman. I'll now ask a qualified representative of the proponent to present the proposal. Please limit the presentation of your proposal to three minutes. Could you please identify yourself and provide the number of shares you represent?
Good morning. My name is Dan Willett, here on behalf of John Chevedden. I'm sorry, I don't have the proxy statement with me on the number of shares. May I proceed?
I think Mr. Chevedden, by our records, owns 50 shares. You, Mr. Willett, you're from the International Brotherhood of Teamsters. We've missed you here. You hadn't been here in several years.
Oh, I was.
Were you?
I was here last year.
Well, I'm sorry, then I'm mistaken. I thought you had missed a year. So-
No, I'm-
Good to see you. Go ahead.
I have... My streak is intact.
All right. Take your best shot. Go ahead.
Our clearly improvable corporate governance, as reported in 2015, is an added incentive to vote for this proposal. GMI Ratings said that Frederick Smith received $28 million in 2014 total realized pay and had $24 million in accumulated pension benefits. Meanwhile, Paul S. Walsh chaired our Executive Pay Committee. Mr. Walsh had 19 years long tenure, which detracts from his independence. Two more directors with long tenure were on our Executive Pay Committee, Shirley Ann Jackson, who received our highest negative votes and was overextended with seats on the boards of five public companies, and Susan C. Schwab, who was designated a flag director by GMI due to her involvement with the Calpine Corporation bankruptcy. Another long-tenured director, James Barksdale, was on our Nomination Committee. Mr. Barksdale was also an inside-related director.
The following key metrics were the most important factors during the GMI environmental, social, and governance rating for FedEx. These include related party transactions, board integrity, overextended directors, severance vesting, restatements or special charges, and history of significant restatements, special charges, and/or write-offs. GMI Ratings reported these material 2014 environmental, social, and governance events. Federal prosecutors said several addicts died soon after receiving shipments of illegal prescription drugs via FedEx. The deaths were included in an indictment filed against FedEx that adds money laundering to a list of charges FedEx has faced over allegations it knowingly shipped illegal prescription drugs from two online pharmacies. California regulators targeted FedEx in a civil complaint, alleging FedEx illegally shipped and handled hazardous waste hundreds of times since 2008.
Returning to the core topic of this proposal, from the context of our clearly improvable corporate governance resolve, the shareholders request our board of directors to adopt a policy and amend the bylaws as necessary, to require of the board of directors, whenever possible, to be an independent member of the board. The board would have the discretion to phase in this policy for the next CEO transition, implemented so that it did not violate any existing agreements. If the board determines that a chair who was independent, when selected, is no longer independent, the board shall select a new chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as chair. This proposal requests that all the necessary steps be taken to accomplish the above.
Many companies already have an independent chairman. An independent chairman is the prevailing practice in the United Kingdom and many international markets.
15 seconds, Mr. Willett.
Thank you. This proposal topic won 50+% support at five major U.S. companies in 2013, including 73% support at Netflix. Please vote to enhance shareholder value, independent board chairman, Proposal Four. Thank you.
All right, I gave you six extra seconds. You got to give them back to me next year, okay?
But with our exchange, that's six or 10 seconds.
All right. The next item of business is the consideration of a stockholder proposal regarding tax payments on restricted stock awards. I will now ask a qualified representative of the proponent to present the proposal. Please limit the presentation of your proposal to three minutes. First, identify yourself and provide the number of shares you represent.
Louis Malizia.
Now, that's how I got mixed up. You, you weren't here last year.
It's been a while, yeah.
Okay. All right. Well, good. We're glad to have you back, and take your best shot.
All right. Louis Malizia, representing International Brotherhood of Teamsters General Fund, 170 million shares. Mr. Chairman, members of the board of directors, and fellow shareholders, I'm proud to move Proposal Five by the International Brotherhood of Teamsters, a leading fund in the movement to improve corporate governance and reform executive compensation programs and policies throughout corporate America. Proposal Five calls for a prohibition on the payment by FedEx for the personal tax obligations of our named executives who receive restricted stock awards. Over the past three years, our company has paid four senior executives a total of more than $5.2 million to alleviate their tax responsibilities from restricted stock awards. This practice and policy is a throwback to the days when the notion of pay for, for performance was merely given lip service.
It has no place in today's corporation, certainly no place in a, in a leading company such as FedEx. We note that the, the chair and CEO does not receive this, this benefit, and we believe that that should be extended throughout the named executive officers. This proposal last year garnered the support of nearly 37%-38% of the outside shareholders. I urge the board to reverse their opposition to this common sense reform, and I ask the shareholders for their support. Thank you.
The next item of business is the consideration of a stockholder proposal regarding proxy access for shareholders. I will now ask a qualified representative of the proponent to present the proposal. Again, 3 minutes, and identify yourself and the number of shares you represent. No one here on this proposal? You want to make a what? Oh, did I get something out of order? Oh, I'm sorry. My fault. The next item of business is a consideration of a stockholder proposal regarding recovery of unearned management bonuses. I'll now ask a qualified representative of the proponent to present the proposal. Please limit the presentation of your proposal to three minutes.
Hi, my name is Jimmy Yan. I represent the office of New York City Comptroller Scott Stringer. First, I want to say, as a native Memphian, I'm very pleased to be back in town, and want to thank FedEx for your, despite my new current New York residency, thank FedEx for its commitment to the city and affirm that there's no more, no better basketball in the world than Memphis basketball.
Football is not bad either right now.
Well, I'm focused on... I'm a Giants fan, but there's no better basketball than the University of Memphis and the Grizzlies. So here, on behalf of New York City Employees' Retirement System, the New York City Police Pension Fund, and Teachers' Retirement System of the City of New York, we're long-term substantial shareholders with 461,065 shares. I want to also acknowledge Myra Young, who's an individual shareholder, who co-filed our proposal. She graciously agreed to withdraw a similar proposal to allow our proposal to proceed. Our proposal requests that the board's Compensation Committee adopt an incentive compensation recoupment policy with misconduct triggers. This would authorize the committee to claw back the senior executives' and the executives' incentive compensation if, in the committee's judgment, there's been misconduct resulting in a violation of law or company policy that causes significant financial reputational harm to FedEx.
And that the senior executive either committed misconduct or failed in his or her responsibility to manage the conduct risks. As long-term shareholders, we believe compensation clawbacks with misconduct triggers are important to align pay with performance and help deter executives from taking actions that are not in the long-term best interest of the company and shareholders. Our proposal gives the committee discretion to decide whether recoupment is appropriate in the circumstances. The policy would also require the board to disclose to shareholders the circumstances of any recoupment under the policy, enabling shareholders to monitor compliance. Currently, FedEx doesn't have a formal clawback policy. In its opposition statement, the board says it will adopt a clawback policy to comply with an SEC rule implementing Section 954 of the Dodd-Frank Act, once the rule is complete.
However, that section mandates the SEC enacted rule requiring clawbacks, specifically in the context of a financial restatement. Our proposal doesn't conflict with this, and it's in fact, complementary to any final SEC rule. Misconduct is critical to clawback policies already adopted by companies. Going beyond the financial restatement context, a 2013 Equilar study of Fortune 100 companies found 10.7% of companies with this policy surveyed had triggers that are based solely on financial restatement. Many companies have enacted strong clawback policies for misconduct, with disclosure requirements for the circumstances of recoupment. Allergan, Capital One, McKesson, PNC Financial, and United Technologies are examples.
We urge your board to consider, to reconsider its opposition to this well-considered reform that will strengthen accountability and encourage effective legal and regulatory compliance. We urge you to vote for Proposal Six. Thank you.
Okay, now, I got the pages reversed here. The proxy access proposal is up next. Is there a representative? Okay.
Mr. Chairman, Louis Malizia, and I'm here on behalf of the Marco Consulting Group, owner of 26,498 shares. Proposal Seven calls for a proxy access bylaw to enable share owners that have collectively held at least 3% of the company for three years to include a limited number of director candidates on management's proxy card. The proposed bylaw is designed to give substantial long-term share owners a meaningful voice in nominating and electing directors. Absent meaningful proxy access, the director election process simply becomes a ratification of management's nominees. We believe proxy access is a fundamental right that should be in place at all companies, regardless of their governance, compensation, or performance.
A 2014 report by the CFA Institute found that proxy access, if adopted market-wide, has the potential to raise U.S. market capitalization by as much as $140 billion. The report also found that in other markets around the world where proxy access is allowed, it is used infrequently and with little disruption to boards. The proposed bylaw includes appropriate safeguards to prevent abuse, includes reasonable ownership and holding period requirements. It also includes a limit, a 25% limit on shareowner nominees to ensure that it will not facilitate a disruptive change of control. We did not select the proposed terms arbitrarily. It was the SEC, following extensive analysis and public comment, that determined that the 3% ownership threshold and other terms were appropriate.
Finally, and most importantly, any shareowner nominee would still have to garner broad shareowner support before he or she could join the board. This year, a growing number of companies in various industries and of various sizes have agreed to voluntarily adopt proxy access for shareowners that have collectively held 3% for three years. Recent examples include Abercrombie & Fitch, Bank of America, Citigroup, Big Lots, Staples, Wendy's, and Yum! Brands. In response to shareowner engagement, the boards of these companies have demonstrated their commitment to an accountable system of corporate governance that fosters long-term value creation. I urge the FedEx board to do the same. In the meantime, I urge fellow shareowners to support Proposal Seven. Thank you.
The next item of business is the consideration of a stockholder proposal regarding political disclosure and accountability. I'll now ask a qualified representative of the proponent to present the proposal. Same rules.
Jimmy Yan from New York City Comptroller's Office again, representing the New York City Fire Pension Fund and New York City Board of Education Retirement System. We're calling on FedEx to ensure full board oversight and full transparency of all uses of corporate assets on any political activities. We're long-term shareowners with 13,530 shares. We understand the board believes a comprehensive system of reporting and accountability for political contributions, lobbying expenditures already exists. But based on our review of your policy, we believe this is not accurate. FedEx's policy is not comprehensive and falls short in a number of ways.
While it addresses disclosure of lobbying activities and contributions to state and local candidates, there are no disclosures for company expenditures to trade associations, no required disclosures to social welfare organizations such as 501 groups, and no required disclosures of other politically active associations, such as 501 groups, that write model legislation. The proposal doesn't ask the company to stop any political spending. It may very well be in the company's interest to engage in public policy. But as long-term investors, we want to ensure that any political spending is aligned with the company's business strategy and not at the whim of individual executives. Moreover, political spending comes with a morass of risks, the risk that spending is ineffective or spending may run afoul of legal and regulatory requirements. Therefore, we want to ensure our directors are exercising judicious oversight of all political spending.
Currently, at FedEx, there is no clearly disclosed policy that the board receives and reviews all political spending, including any assets on those groups that I mentioned. Moreover, we believe transparency enhances accountability. Accordingly, the proposal asks the board to adopt a policy of full disclosure of all political spending, but also, crucially, any spending often referred to as dark money that may be flowing to 501 or 501 groups and trade associations. Absent full disclosure of political spending activities, shareholders have no way of ensuring that such corporate political contributions are consistent with advancing the policy objectives and long-term interests of the company. Over 118 companies have agreed to this appropriate standard of disclosure. We believe FedEx should bring its practice in line with this model. We urge the board to exercise independent oversight and ensure full transparency in line with this proposal. Thank you.
The next item of business is the consideration of a stockholder proposal regarding political lobbying and contributions. I'll now ask a qualified representative proponent to present the proposal. Please limit your proposal to three minutes, and, if you could tell us who you are and provide the number of shares you represent.
Good morning. I am Sister Valerie Heinonen, representing the Dominican Sisters of Hope, and here on behalf of one of the clients of Clean Yield Asset Management, co-filers of the political spending Proposal Nine, found on page 72 of your proxy statement. I move Proposal Nine, political lobbying and contributions. In effect, after having heard the preceding speaker on his political spending resolution, my statement, in effect, is a second. We believe our company has an obligation to its stakeholders and the general public to be fully transparent, especially since its lobbying presence is so heavy. FedEx has the highest lobbying budget in 2015 to date among air transport companies and has outspent this in-industry sector, sometimes very significantly, going back at least as far as 2010, according to opensecrets.org.
FedEx's last materiality assessment confirms the importance of two interlinked priority goals: reducing aircraft fuel usage and its associated GHG emissions. In our company's own words, its CSR report, this activity has a high influence on business success and is of high importance to stakeholders. Thus, FedEx has set an ambitious goal to obtain 30% of its aviation fuel from alternative sources by 2030, and yet you're on the U.S. Chamber of Commerce Board and a member of ALEC, two organizations with well-documented opposition to strong climate policy. FedEx spent $25.6 million in 2013 and 2014 on direct lobbying activities. For example, FedEx spent over $263,000 lobbying in California for 2014. Also, FedEx does not disclose its membership in tax-exempt organizations that write and endorse model legislation.
We believe that FedEx Board of Directors should recognize that good corporate governance today includes a political spending policy that is transparent, offers full disclosure, has board oversight, and is available to investors in its entirety on its corporate governance web section. I also,
15 seconds, sister.
Yeah. I also urge FedEx to check out its rating on the CPA-Zicklin Index and move up from tier four.
Sister, you didn't say how many shares you were representing. Do you know for the record?
Over 9,000.
Nine thousand.
Thank you.
All right. So the next item of business is a consideration of a stockholder proposal regarding alignment between corporate values and political contributions. Political contributions seem to be the theme of the meeting here. I'll now ask a qualified representative of the proponent to present this proposal.
Good morning.
Good morning. How are you?
I'm fine. My name is Christine Jantz from NorthStar Asset Management in Boston. NorthStar is the beneficial owner of over 22,500 shares of FedEx stock, worth over $3.4 million. I am here to ask for your support of resolution number 10, a request for an analysis of the alignment between our company values and policies and our political contributions. FedEx does not disclose all of corporate political spending. However, we do disclose contributions made by the company's political action committee, which may accept contributions from shareholders, directors, and the firm's executives. Senior management makes all the decisions about both PAC and corporate contribution recipients, therefore, it's reasonable to assume any biases in PAC contributions will exist in company contributions as well.
FedEx's Code of Business Conduct and Ethics, which our company states applies to everyone, lays out the issues which drives the company's and political action committee's political giving. The code includes a commitment to avoid adverse impact to the environment and communities where we do business, and states that we also have strong policies on equal employment, refusing to tolerate harassment, violence, bullying, and discrimination of any kind involving sexual orientation, gender identity, and gender expression. FedEx Code of Conduct and Ethics does not make exceptions or excuses. For example, there is no demarcation which says it's okay to harm the environment or discriminate when business interests are involved in some circumstances. But senior management has repeatedly made contributions to political candidates that have violated our published code of business conduct and ethical values.
For example, just since 2013, the FedEx PAC gave $hundreds of thousands to candidates with a record of voting against hate crimes legislation. One such beneficiary of our campaign contribution, Dave Camp, not only voted against hate crime legislation, but also voted to deregulate greenhouse gas emissions and voted yes on opening the Outer Continental Shelf to oil drilling. We have also supported Roy Blunt, who voted against reauthorizing the Violence Against Women Act and who voted against prohibiting job discrimination based on sexual orientation. How can we, both as a company and as individuals, state that we stand for certain values, but then give support without full consideration of how these candidates vote on these issues? Our proposal does not seek to prohibit or restrict contributions, because we understand that the world is not black and white.
However, management needs to show shareholders that it is weighing the importance of our political contributions in the face of how they may undermine or promote the good work we're doing in these areas. Even The Conference Board recommends that companies examine proposed expenditures to ensure that they are in line with the company's values and publicly stated policies, and that they do not pose reputational, legal, or other risk to the company. We hope the company recognizes the importance of our requested closer scrutiny, and we ask shareholders to vote in favor of proposal number 10.
That concludes the presentation of the formal agenda items for the meeting. Finally, as discussed in the proxy statement, a group of stockholders has notified us of their intent to make a floor proposal at this meeting... relating to FedEx's long-term sponsorship of FedEx Field. I'll now ask a qualified representative of the proponents to present their floor proposal. Again, please limit the presentation of your proposal to three minutes. Before you begin the presentation of the floor proposal, please identify yourself, each of the stockholder proponents, and the number of FedEx shares each stockholder proponent owns.
Good morning. I'm Susan White with the Oneida Tribe. We have 36 shares, and we have co-filers on this proposal, Mercy Investments and Trillium Asset Management. Susan White. Good morning. My name is Susan White, and I am Oneida. The Oneida Tribe of Indians of Wisconsin is a federally recognized tribe west of Green Bay, with 17,000 registered tribal citizens. For 6 years, the Oneida and co-filers have been talking with FedEx about the controversy surrounding the name of the Washington, D.C., NFL franchise and FedEx's association through its naming rights on the team's stadium. I've been here before with this message and similar requests. The controversy has been mainstream, but I understand this is new information for many of this audience. Native Americans have fought harmful mascots for over 50 years. I'm here with co-filers to present for a vote, a shareholder floor proposal.
Your company representatives have green ballots to vote item B, the floor proposal. Much of America does not know the true history of Native Americans, which is presented by others to mainstream society in stereotypes. They do not know the Washington, D.C., franchise named Redskins is a dehumanizing word for Native Americans and others concerned about human rights. The Washington team name traces back to colonial times, when bounties were paid for the skins of Native men, women, and children and traded like animal hides. The term did not honor Indian peoples then and represents racism and genocide today. One has to know this to learn from it. On Saturday, Pope Francis said, "Remembrance saves the people's soul from whatever or whomever would attempt to dominate it or use it for their interests.
When individuals and communities are guaranteed the effective exercise of their rights, they're not only free to realize their potential, they also contribute to the welfare and enrichment of society." He was talking about this nation's founding principles, religious freedom, and immigration. I found it appropriate for today and Native Americans. There are a few national sports teams that still use terms that objectify us, but the Redskins is the most egregious. This is much more than a social issue affecting a small ethnicity. The issue impacts people, just like the Confederate flag did and does. There's a long-growing list of all who raise awareness and support the name change in one form or another, including National Congress of American Indians, congressional representatives, federal agencies, NFL analysts, broadcasters. I cannot list them all. We believe the Washington, D.C., NFL football franchise must stop using the term for its name.
Like other corporations, Philip Morris, Coca-Cola, FedEx should protect its values and shareholders' values by discontinuing its association with names that disparage Native peoples. I'm sure FedEx's board and management are sensitive to racial concerns and will work in positive ways to address racist names and logos. I therefore now present for a vote the shareholder floor proposal, which requests the board issue a report by January 2016, describing the legal steps FedEx has taken and/or could take to distance itself from the Washington, D.C., NFL team name. Thank you very much for your time. Please remember to request a green ballot.
In that regard, if there is a registered stockholder or a stockholder who brought a legal proxy with them to the meeting, who wishes to vote on the floor proposal, please raise your hand so we may distribute a separate ballot for this proposal. One in the back? All right, as soon as you mark that ballot, if you'll give it to a FedEx representative, and we've got a couple of minutes here before we can take comments. Well, is that right? Yeah, we've got to close the—we have to close the proposals, and then we'll be happy to take comments on any of the proposals. We have to give the ballot to the person, the gentleman that's voting on the floor proposal. So now, ladies and gentlemen...
As soon as we get this ballot back, we can go on and open up the floor, can't we? While that's going on, I'd like to open the floor to any discussion regarding these proposals. Any questions or comments relating to any of the proposals should be made at this time, not during the general and question and answer period following the conclusion of the meeting. Please remember, questions or statements that are irrelevant to the business of the company or repetitions, repetitious questions or statements by other stockholders will not be permitted. If there are any questions or comments not directly related to these proposals, please defer them until after the conclusion of the meeting. The audience will be given the opportunity to ask general questions at that time. Okay, now, I think the... Okay, you two can go, and then, Mr.
Wickens will be the third one. All right, go ahead, please.
Good morning, Mr. Chairman. My name is Brianna Murphy of Trillium Asset Management, and the 30 shares I represent are in support of the floor proposal, urging the company to distance itself from the Washington football team name. With my limited time, the argument I would like to offer in support of the Oneida's floor proposal is a practical one. It is our belief that it's only a matter of time before the team feels it must change its name. Maybe it will be this year, maybe next, or the year after.... Maybe it will be because sponsors like FedEx distance themselves from the team. Maybe it will be because the Fritz Pollard Alliance, which promotes NFL diversity and is named after the first Black NFL head coach, announced opposition to the name in 2015.
Maybe it will be because thousands of people protested at team games in the 2014-15 season. Maybe it will be some combination of these and other events. Maybe it will be something that has not happened yet, but we very much believe that it will happen one day. In light of this momentum, Trillium thinks that it's the company's best interest to be a positive contributor to that endpoint, to be part of the solution and to plan for it. Trillium thinks that FedEx distancing itself now from the team name is the best way for FedEx to do that.
But at the very least, we urge the chairman and all the people responsible for relations with the Washington team to express their, to their contacts at the team that now is the time to develop an exit strategy, to put in place a plan to change the name, because when the change comes, it will be much easier for FedEx that it, if it is done with a plan. Admittedly, right now, progress towards the name change is happening relatively slowly, but the pressure is relentless, and that day will come when the name changes. FedEx should prepare for that day. I would like to add that Calvert Investments has authorized me to say that it supports this statement. Thank you.
All right, there's another one. The questions or comments are limited to two minutes.
I'm Dan Willett. I have a question on proposal one, the election of directors for one of the nominees. I'm representing the New York Carpenters Pension Fund, owner of 4,100 shares. My question is for Director Edwardson, because he is chair of the audit committee. A U.S. presidential executive order called the Fair Pay and Safe Workplaces executive order was signed by President Obama in August 2014. The Department of Labor posted implementation guidelines in May 2015. The executive order requires companies bidding for federal work to report violations of federal and state employment laws for the previous three years. Violations are classified by severity on a scale that ranges from serious to pervasive. Is our company's contract with the US Postal Service under the jurisdiction of this executive order?
If it is, Director Edwardson, what effect or what actions will you take on the board, with our company's record, and what effect will it have on holding onto this contract with the U.S. Postal Service? Thank you.
Despite the question being directed to the Chairman of the Audit Committee, I'm gonna ask the General Counsel to comment on this first, because she knows the specific details of this contract, and then ask the Chairman of the Audit Committee to make any further comments.
We comply with all applicable laws and regulations. We don't comment on our relationships with respect to specific customers.
Anything you want to add to that, John? Chairman of the Audit Committee says he'll stand with that. Next comment.
Good morning. My name is Ron Wickens. I represent my personal shares and the shares of the family trust. I'm not sure of the exact amount, Chris, but it's, it's enough shares. I'd like to comment on the term Redskins. I am an American Indian, a member of the Potawatomi Tribe of Oklahoma. My four children and my eight grandchildren are also Potawatomi members. We like the term Redskins. We are Redskins. You know, when I was growing up, my parents had a choice of sending my brother and I either to Indian school or public school. Oklahoma only became a state in 1907, so my parents sent us to public school.
Ended up going through public school, served proudly in the United States Air Force as a pilot, as also did my brother, served in the U.S. Air Force. But as a member of the Potawatomi Tribe, we do not object to the term Redskins, and I'm somewhat baffled and astonished by all of this controversy. There's other terms that we've been called that are offensive, but certainly not the term Redskins. And I follow the team, and I would very much like the term, the term Redskins for that football team to stay. I think it's, it's it leaves us a proud tradition of, of, of contribution. So thank you.
Other questions, comments about the proposals? Sister?
Yes. And again, Sister Valerie Heinonen, on behalf of Dominican Sisters of Hope and Mercy Investment Services, I have been a number of shares in this one, over 9,000. Once again, Mercy Investment Services have filed a resolution for the proxy statement and this floor resolution asking for the legal steps our company could take to distance itself from the Washington team's name. Unfortunately, the SEC staff did not see the mounting public pressure, evidenced by the Trillium speaker just a couple minutes ago. The Washington team's name is racist and a dehumanizing word with hateful connotations for Native American peoples and others concerned about human rights. Due to the SEC ruling, Mercy again joined the Oneida Tribe in refiling our floor resolution.
We continue to believe that it does not benefit FedEx to be associated with racial inequality, racist words or images, despite one tribe believing that it is a term that they can live with. We, FedEx investors, believe we have brought before you a matter of human dignity and justice, no matter how unpopular these kinds of values may be in our current atmosphere of racial hatred, which we can see played out against President Obama and other Native, other African Americans, and the vindictiveness with which a lot of these comments are being made. Thank you.
Any other comments or questions on any of the proposals? Okay. I believe that concludes then the discussion on the proposals. We'll now have the Inspector of Election give a report on the preliminary voting results. I believe all the stockholders who received ballots have marked them and turned them in. Correct? You got one there? Got another one there coming down. I think we have two ballots there, huh? Oh, more than that. There we go. Okay, I think we now have all the ballots, or is there another one coming? Is that it? Going once, going twice. We now have all the ballots, and I hereby declare the polls closed at 8:44 A.M. Central Time on 28th September 2015. I'll now ask the Inspector of Election to report on the preliminary voting results for each of the proposals.
Chairman, there are present at this meeting, in person or by proxy, 251,787,860 shares of the company's stock, out of a total of 282,500,880 shares outstanding and entitled to vote. With respect to Proposal One, the election of directors, each director nominee received more votes cast for such nominee's election than against such nominee's election. With respect to Proposal Two, the advisory resolution to approve named executive officer compensation, a majority of the shares present in person or represented by proxy and entitled to vote, have been voted in favor of this proposal.
With respect to Proposal Three, the ratification and appointment of the independent registered public accounting firm, a majority of the shares present in person or represented by proxy and entitled to vote, have voted in favor of this proposal. With respect to Proposals Four through Six, Proposals Eight through Ten, and the Floor Proposal, a majority of shares present in person or represented by proxy and entitled to vote, have not voted in favor of these proposals. With respect to Proposal Seven, the stockholder proposal regarding proxy access for shareholders, a majority of the shares present in person or represented by proxy and entitled to vote, have voted in favor of this proposal.
All right. Thank you, Mr. Ruocco. To summarize the voting results, each of the director nominees has been duly elected to serve as a director of the company. The advisory resolution to approve named executive officer compensation has been approved. The appointment of Ernst & Young, LLP, as the independent registered public accounting firm of the company for fiscal year 2016, has been ratified. The stockholder proposal regarding proxy access for shareholders has been adopted. Although not binding on the company, the board of directors will certainly take the recommendation of our stockholders into account as we evaluate our governance structure. The other stockholder proposals have not been adopted. Please note that the voting results announced by Mr. Ruocco are preliminary. Final voting results will be included in a Form 8-K filed with the Securities and Exchange Commission following the meeting.
Now, ladies and gentlemen, that concludes the official business portion of the meeting. There being no further business, the meeting is hereby adjourned. I'll conclude with some brief remarks and a corporate overview, followed by a general question and answer period if anyone has any other questions. Fiscal year 2015 was a transformative year for FedEx. We delivered outstanding financial results and stronger customer solutions. We think we took effective action to generate increased long-term value for our shareholders. We believe the TNT Express, GENCO, and Bongo acquisitions we announced may prove as important to FedEx as the addition of Flying Tigers in 1989 and Caliber System in 1998.... We hope the TNT Express transaction will be concluded in the first half of calendar 2016. As we reported, we're on target to achieve the goal of the FedEx Express profit improvement plan we announced in FY 2013.
Due to increasing e-commerce, low density shipments, we took action to ensure we're more adequately compensated for the high-quality services we provide customers. At FedEx Ground, we extended dimensional weight pricing to more shipments. We also adjusted the fuel surcharge rates at all transportation companies in an attempt to reduce volatility and to recognize the increasing number of oversized packages and residential deliveries. For the first time, our 2015 rate increase, announced combined Express, Ground, and Freight details, giving our customers a broader view of our services and more time to plan their logistics budgets. Part of the success of our operating performance is due to the built-in flexibility of our strategy. In essence, flexibility differentiates FedEx from our competitors. Each of our operating companies can be fine-tuned to deliver the best service and value for the market segment served.
Our strategy of compete collectively, operate independently, and manage collaboratively has helped us successfully navigate a couple of tough challenges. A holiday season last year beset with very, very difficult winter conditions, and as I mentioned a moment ago, a rapidly evolving e-commerce landscape. And lastly, customers adversely affected by the labor disruptions at U.S. West Coast ports, which played havoc with a lot of inventory systems. Our use of industry-leading automation at FedEx Ground allows us to quickly and efficiently process increasing package volumes. During that peak season, we experienced record shipping volumes, but not always from the locations or on the days expected. Thanks to seamless execution by our team members and our automated hubs, FedEx Ground was able to quickly accommodate customer needs. In addition, our sales force worked closely with customers to anticipate their needs for volume and timing months in advance.
Such planning allowed us to meet our commitments efficiently and profitably. At the heart of our business is a broad portfolio of solutions that serves a wide range of logistics needs. Customers using all three FedEx major transportation companies account for about 77% of U.S. revenue, and 96% of U.S. revenue is generated by customers utilizing two or more of our transportation companies. Of course, FedEx Services provides common sales, marketing, revenue management, customer service, and information technology support. Our team members in FedEx Services continue to modernize our IT platforms to lower costs and make us more agile in meeting shifting market demands and changing customer needs. In fiscal 2015, services, including FedEx Office, which is a part of the FedEx Services segment, was key to some of our most important accomplishments, including industry-leading pricing management and more convenient solutions for customer pickup and drop-off.
FedEx Express is lowering costs and increasing base yields through its profit improvement program. Our largest operating company is also retiring older aircraft while adding new Boeing 767 freighters to rationalize capacity and modernize our aircraft fleet. We're serving customers with more efficiency for their less time-sensitive shipments as well. FedEx Ground continues to pull ahead of the competition. Our margins at Ground are solid, and we continue to improve service levels. FedEx Ground is faster to more locations than our major competitor. As e-commerce continued to reshape the transportation business in FY 2015, FedEx Ground invested $1.2 billion in facilities and automation to support FedEx growth. FedEx Freight is focused on improving quality through more efficient routing of shipments and a better balance of volume and yield growth.
We'll continue to enhance our position at FedEx Freight as the market leader in the LTL segment and try hard to reinforce our reputation as a great place to work. Our most competitive advantage remains our team members, who deserve the credit for our outstanding performance this year. They again came through for our customers, especially during another record-breaking peak season. Our commitment to corporate social responsibility is more important than ever to customers, and we strengthen that commitment by integrating our citizenship objectives into our business. In recent years, we found that customers who wanted more information on our citizenship programs were also customers who generated billions of dollars in revenue for FedEx. By consuming resources efficiently, we reduced our environmental footprint and lowered costs. To support our communities, FedEx and FedEx team members donated $48 million in FY 2015.
We're proud that FedEx was once again named by Fortune Magazine as one of the world's most admired companies and number 1 in the delivery industry. We were also named one of the world's most reputable companies on the Reputation Institute's annual Top 100 list. FY 15 was a historic year for FedEx, and we're committed to capitalizing on our momentum. To make this happen, we'll focus on three areas: ... We will continue to create, to the best of our ability, loyal customers by solving their business problems and helping them succeed. We'll accelerate, accelerate our use of leading-edge technology to deliver better customer service and to work more efficiently and profitably.
We'll remain true to our People-S ervice-P rofit philosophy by providing team members the best training, tools, and career opportunities, the safest, inclusive, most inclusive work environment we possibly can, fair pay and benefits, and recognition for jobs well done. FedEx is on an excellent trajectory for FY 2016 and beyond. We believe our company has never been positioned to build long-term shareowner value better. Thank you very much, and I'll now be happy to take any questions anyone might have.
Good morning, Mr. Chairman. My name is Chris Buschmeyer, a proud representative of Teamsters Local 107 in Philadelphia, Pennsylvania, and I am here today as a proxy of the Empire State Regional Carpenters Pension Fund, holders of 2,300 shares of FedEx stock. I would like to direct my question to the Audit Committee Chair, Director John Edwardson. Mr. Edwardson, what is the total expense the company has incurred related to thwarting FedEx Freight employees' attempts to form a union? I believe the company has spent millions on legal fees, anti-union consultants, and staff time. In Croydon, Pennsylvania, where the company employs 47 full-time drivers, FedEx Freight hired LRI Consulting Services, who report the company paid them $161,000 in 2014. The firm also charges $3,000 a day per consultant.
This firm retains East Coast Labor Relations, M&C Labor Relations, and O'Mara and Associates to conduct the anti-union campaign. In terms of staff time, in Parkersburg, West Virginia, where FedEx Freight employs 13 city drivers, the company had brought in 12 supervisors to supervise those employees on a daily basis. While the drivers were organizing their union with the Teamsters, FedEx Freight senior officials conducted ride-along sessions with drivers to dissuade them from voting for the union. The company held captive audience meetings and showed videos of strikes and violent labor management conflict. I firmly believe the sole purpose of these activities was, and the payment of the consultants, is to intimidate employees from exercising their rights at work. In fact, various FedEx Freight locations voted for union representation. The company has not complied to the request to begin the collective bargaining process.
FedEx was found by the National Labor Relations Board to have violated federal labor laws. How can our company justify this wasteful expense that results in dividing the workforce and harming FedEx's reputation? On behalf of the FedEx Freight drivers who have voted for the Teamsters representation in California, New Jersey, North Carolina, Pennsylvania, will you pledge that FedEx will respect their vote that has been sanctioned by the National Labor Relations Board and commit to collectively bargaining?
Your two minutes are up.
Thank you very much.
I'm not gonna direct that to the Audit Committee. That was a political statement, and we don't comment on issues that are in litigation at the management level or at the board level. The classification issues involved in these three or four FedEx Freight locations are in court at the moment, so I'm going to ask the General Counsel to comment on it.
As you know, we are challenging the outcome of those elections through our lawful process in litigation at this time. We comply with all of our legal, legal obligations in the conduct of our, management and supervision of all of our employees. We continue to be committed to our belief that our employees are best represented through a direct dialogue between the employees and management, but we are respectful of their right to take action and always act in compliance with law.
Another question.
Good day, Mr. Chairman. My name is Greg Chalkley. I'm here, representing the Southwest Carpenters Pension Trust Fund, holder of 20,289 shares of FedEx stock. The issue today that I'd like to speak on is the healthcare affordability for FedEx employees. The company recently announced that for the first time in over a decade, the cost to employees will not rise in 2016. While the many FedEx workers that regularly communicate with the Teamsters union throughout FedEx's business segments appreciate that their costs are not rising this coming year, the fact remains that the medical benefits offered at FedEx are too expensive, offer subpar coverage, and are overly burdensome for far too many employees.
Workers with a family who choose our best plan, known as Premier, face out-of-pocket maximums of over $16,000 per year, and between premiums and high deductibles, a cost of over $7,000 to the employee before the mostly 70/30 plan kicks in. This is the best plan offered. This situation is not sustainable. Our employees are upset. We claim a first-class company, but provide substandard benefits. When serious illness occurs in many documented instances, bankruptcy is an employee's only answer. Our company's choice to offer high-cost, low-coverage health insurance does not have to continue. Many cost-effective and affordable medical plan solutions have been found and secured through collective bargaining relationships with the Teamsters union. Workers at many companies, including some of our competitors, do not face such burdensome medical cost demands as FedEx employees do.
15 seconds please.
Why are corporate resources being spent to intimidate workers from exercising their federal rights to form their union? And why not take the rational approach and sit down with employees and their union representative to tackle and solve the healthcare issue at FedEx? Thank you.
Okay, this was the Carpenters Union. I'm gonna make a comment about this. I think this is something that everybody in this room, everybody who works for FedEx, and every American needs to understand. The biggest proponents of the Affordable Care Act, when it was passed, was organized labor in the United States. The Affordable Care Act's aim was to increase coverage of people in the United States who had no health care. It did that in the main by transferring money from people who already had health care or could afford it and didn't get it, to people who didn't have it or people who couldn't get it. That was the aim. That's been well documented. That's out there in the public arena. There was an exemption for employees who were covered by collective bargaining agreements until 2018.
In 2018, a so-called Cadillac tax or an excise tax on plans above a certain level will kick in, including all of the organized labor plans that you just referred to. So it's no surprise now that among the leading proponents to turn around the Cadillac tax or the excise tax on these plans are organized labor representatives. FedEx, like all major employers, has to comport with the law, and so we changed our health care plan to provide our employees with health savings accounts, where the company gives them cash dollars on the front and preventative medical care, broad tools on the Internet to help people become better shoppers, and of course, higher deductibles and higher co-pays in some cases were necessary because of the Affordable Care Act, which your union representatives strongly supported, as did the Teamsters.
This year, because of the success in our consumer-driven health care plan that we instituted, we were able to not have to increase those costs, and so we're having good results with this, changing people's behavior. Not going to the emergency room, which costs $750-$1,000, but going to a minor medical center where the cost may be $50. We opened up two medical care centers here in Memphis, one near our hub and another one in a central location, to provide first-class medical care and reduce people's medical costs. So quite frankly, I'm not very sympathetic to a union representative talking about the problems with high deductible plans because you were the primary people that put that legislation through. No, I think you've had your question. That's it. You wanted to take a shot. I answered it. That's it. One question.
No, you, you didn't put any of the things I just told you in there as to why we had to do the things. That was the missing link. That's it. Next question. Next question. Everybody's entitled to one question and one answer. No more questions?