FedEx Surprises Wall Street with Resignation of President & COO David J. Bronczek

FedEx Corp. President & Chief Operating Officer

FedEx Corp. has announced that Raj Subramaniam (pictured left above) has been appointed the president and chief operating officer, effective March 1.

This appointment follows David J. Bronczek’s personal decision to retire as president and chief operating officer and from the Board (pictured right above).

Subramaniam will continue to serve as president and CEO of FedEx Express and will also serve as co-president and co-CEO of FedEx Services.

Subramaniam has been with FedEx for more than 27 years and has held various executive level positions in several operating companies and international regions.

He began his career in Memphis and subsequently moved to Hong Kong, where he oversaw marketing and customer service for the Asia Pacific region.

Subramaniam then took over as president of FedEx Express in Canada before moving back to the U.S. as senior vice president of international marketing.

He was then promoted to executive vice president of marketing in 2013 at FedEx Services, prior to being named executive vice president and chief marketing and communications officer at FedEx Corporation in 2017.

“On behalf of the Board and management team, we recognize Dave for his years of service to FedEx. FedEx has a deep bench of talent, and I am confident that the transition will be seamless,” said Frederick W. Smith, chairman and chief executive officer, FedEx Corporation.

“Raj Subramaniam has significant experience in many areas of our portfolio, which will be vital as he steps into this position.”

Integration Issues

Kevin Sterling, a Seaport Global Holdings analyst told Bloomberg, “My sense is the integration is not going well.” Europe has generally been weak for shipping companies recently, he said. “I think it’s been harder than they would have bargained for.”

Announcing two major executive shakeups since December caught investors by surprise, said Rick Paterson, an analyst with Loop Capital. FedEx has a reputation of steady management under Smith’s leadership, with executives accumulating decades of experience as they ascend the ranks.

Read: The Top 2019 Logistics Trends Shippers Should Know About

As reported by Max Garland, Memphis Commercial Appeal, longtime FedEx shareholder Trip Miller, managing partner of Gullane Capital Partners, said in an email Bronczek’s retirement is “very surprising and concerning” considering his recent appointment to the board. Still, FedEx’s core business is strong and its leadership bench runs deep, he said.

“It seems there is something going on internally that requires further explanation to investors,” Miller said.

Read: FedEx Will Be Doing More with Less and They Are Not the Exception

FedEx shares fell 3.6 percent to $177.30 at 9:34 a.m. Friday in New York. FedEx fell 24 percent over the 12 months through Thursday, compared with a 4.9 percent gain for rival United Parcel Service Inc.

Image: FedEx

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