FedEx Corporation Adopts Majority Vote Bylaw
The Teamsters have long supported high corporate governance standards at publicly-traded companies including FedEx Corporation. Shareholders in FedEx need to have transparent rules that build accountability into the oversight mechanism to govern the Board of Directors and the corporation.
On March 13, the shareholders of FedEx scored a victory in the company's decision to adopt a change in its bylaws to enact majority-vote elections for its Board of Directors. This change increases the rights of shareholders to exercise their votes in Board elections as a way to keep all Board members accountable. As the Teamsters General Fund shareholder proposal argued in 2006:
Under the Company's current plurality vote standard, a director nominee in a director election can be elected or re-elected with as little as a single affirmative vote, even while a substantial majority of the votes cast are "withheld" from that director nominee. So even if 99.99% of the shares "withhold" authority to vote for a candidate or all the candidates, a 0.01% "for" vote results in the candidate's election or re-election to the board.
And what was FedEx Corporation's position in 2006? The Board opposed the Teamster proposal saying, "The Board of Directors and its Nominating and Governance Committee oppose this proposal because the proposed change is unnecessary and has the potential to disrupt FedEx's highly effective corporate governance processes. Moreover, making this fundamental change right now would be premature...At this point in time, however, we believe that the proposed change would raise many difficult issues and perhaps have unintended, unforeseen, unnecessary and potentially harmful consequences for our stockholders."
The 44% of FedEx shareholders who voted for this proposal must be pleased that the company re-considered its opposition and adopted these changes.