MEMPHIS, Tenn. (WMC) - The CEO, chairman, and founder of FedEx is taking a major pay cut during the COVID-19 pandemic.
According to the Memphis Business Journal, a document filed with the U.S. Securities and Exchanges Commission (SEC) shows that Fred Smith has taken a 91% reduction in his base salary for the next six months.
His pay will reduce from $115,402 per month to $10,728 per month until Sept. 30. After taxes and other deductions, that will result in a net pay of $1 per pay period.
MBJ says the decision was approved by the independent members of the board of directors of FedEx Thursday, after the recommendation of its compensation committee. According to the document, it was Smith who requested the pay reduction.
The SEC filing shows business-to-business demand across all FedEx transportation segments has been affected. Due to increases in e-commerce, FedEx Ground has seen more customers. However, the shift in mix is expected to hurt margins and operating results.
To increase cash position and preserve financial flexibility, FedEx also disclosed in the SEC document that it notified lenders on March 18 about its plans to borrow $1.5 billion from a 364-day credit agreement.