FedEx Corp. said on Monday Fred Smith would step down on June 1 as CEO of a package delivery company founded and followed by the company’s president and chief operating officer.
Raj Subramaniam will serve as CEO and president and Smith will serve as chairman, the package delivery company said.
Smith, 77, started FedEx in 1973, delivering smaller packages and documents much faster than the mail. Over the next half century, he oversaw the growth of a company that combined air and ground service and became an economic bellwether due to its service to other companies.
“FedEx has changed the world by connecting people with opportunities over the last 50 years,” Smith said in a statement praising Subramaniam’s ability to direct the company. Smith said he would focus on global issues including sustainability, innovation and public policy.
Subramaniam, 56, joined the company in 1991 and has worked in several sales and management operations in Asia and the United States. He rose to become the chief marketing and communications officer, and also served as chief executive of FedEx Express. He became president and chief executive officer in 2019 and joined the board of FedEx the following year. He will always be the director.
Smith said a few years ago he had made recommendations to FedEx executives that if he died or became disabled they should name the CEO of Subramaniam and appoint an independent chairman. On Monday, the board elected the current director, Brad Martin, as deputy chairman and re-appointed Smith as chairman.
Smith told FedEx staff the news in an invitation that traces the history of another company based in Memphis, Tennessee. FedEx started with 14 flights and 389 team members, delivering 186 packages on the first day of operation.
“We were a small start and we had our share of skeptics,” Smith said. He is proud that the company continued to be “a global humanitarian and opportunity that will change our world for the better.”
FedEx and United Parcel Service’s competitors have benefited in recent years from the growth of online purchases, which means more packages for its drivers to bring to their customers door. In 2019, as Amazon.com builds its own delivery business, FedEx canceled the contract to provide the giant, and suspended Amazon delivery soon after.
FedEx was hurt by a trade war with China, and Smith often used forums such as quarterly revenue to deal with taxes, making him one of the few CEOs of a major US corporation to challenge then-trade trade policies of President Donald Trump.
The company has earned $ 5.2 billion of its $ 84 billion revenue in its most recent fiscal year, which ended May 31 last year.
Smith and the company named after him own more than 19.2 million shares, according to FactSet. They cost more than $ 4.4 billion on Monday’s closing price.
FedEx shares increased by almost 2% in after-hours trading.