FedEx chief's position at risk with Loeb entry
The announcement of Daniel Loeb to acquire an ownership in FedEx Corp has threatened the security of Fred Smith, who is president and chief executive of the global courier delivery services company.
Smith had been leading FedEx since its operations in 1971. The idea that sired the company started during his years as a Yale University undergraduate, when he described the concept of an airfreight carrier that is both reliable and fast in his paper. Smith developed his idea during his time with the Marin Corps in the Vietnam War.
Loeb's hedge fund, Third Point LLC, was known to have a history of shaking up board and corporate management in companies. Loeb had been putting efforts to replace the current chief executive of auction house Sotheby's. The investor had also a hand in the resignation of a Yahoo Inc executive back in 2011 due to pressure of his calling out the executive's educational attainment.
John L. Weinberg Center for Corporate Governance director Charles Elson at the University of Delaware said, "At some point Smith's career is going to come to an end, and the appearance of an activist is a reminder. Smith is a very overpowering figure. Loeb is an icon, too."
when asked about his retirement last year, Smith said, "I'm not planning on going anyplace." Smith is currently implementing a USD1.7 billion strategy that would cut costs and increase earnings for FedEx in a market where customers opted for other cheaper alternatives to courier and delivery services.
Standard & Poor's Capital IQ analyst Jim Corridore said, however, that Loeb may not be planning to ouster Smith, but company executives were expected to be careful around Loeb. "I don't think that he always has to take agitation as a position -- sometimes you can just invest in a company. His mere presence on the list of shareholders will keep the company on its toes."