Shares of Federal Express (FDX) rose 14% yesterday (June 14) after the shipping and logistics company announced that it is raising its quarterly dividend by 53%.
FedEx’s dividend payment will be $1.15 U.S. per share going forward, the company said. The dividend increase comes even as the company grapples with high fuel costs and labor shortages that are impacting its business.
When announcing the dividend increase, FedEx also announced that it is adding “total shareholder return” as a performance metric to its executive compensation program.
And FedEx announced the appointment of two new directors to its board -- Amy Lane, a former Merrill Lynch executive, and ex-Union Pacific (UNP) chief operating officer (COO) Jim Vena. Those additions bring the board to 14 directors, 12 of whom are independent members.
The changes at FedEx were prompted by activist investor D.E. Shaw, which holds about one million shares of the company, and comes just two weeks after Raj Subramaniam assumed the chief executive officer (CEO) role at FedEx following the retirement of company founder Fred Smith.
The 14% rise in FedEx stock was the biggest one-day gain for the shares since 1986. The stock has fallen 11% this year to $229.95 U.S. per share.
