The International Brotherhood of Teamsters is calling for the rejection of the compensation package proposal that is being raised at XPO Logistics’ annual shareholders meeting today.
In a press statement, the union complained that XPO CEO Bradley Jacobs received an incentive award of up to $80 million, despite reports that the company received more than $141 million from the British government in pandemic relief while XPO’s British workers either risked their health during the pandemic or were furloughed at only 80% of their wages.
The Teamsters added that two proxy advisory firms, Glass Lewis and Institutional Shareholder Services, share their objection to the company’s pay practices.
The union also pointed out that XPO is spinning off the logistics arm of its business, adding this is “expected to further enrich Jacobs, who will own 17% of both companies.” Last December, the company paid Jacobs $20 million in exchange for future dividend rights he held, the union added.
“There are countless reasons why XPO shareholders should be furious about (Jacobs’) excessive pay package,” said Ken Hall, International Brotherhood of Teamsters general secretary-treasurer. “If XPO’s mistreatment of its workforce and its concerning response to the COVID-19 pandemic are not enough for shareholders, then investors should look at the company’s continued use of large ad hoc awards that are simply outsized for this company.
“Now is the time to vote for serious reforms at XPO after years of the company dumping money into one man’s pockets,” Hall added.
In a recent letter to XPO’s shareholders, the union also urged investors to support its calls to appoint of an independent board chairman and to reject the re-election of three incumbent members of the board’s compensation committee.
In response, an XPO spokesman referred to a recent SEC proxy filing that included an explanation of the Greenwich firm’s executive compensation. “We believe that our compensation programs appropriately reward executive performance and align the interests of our NEOs (named executive officers) and key employees with the long-term interests of our stockholders, while also enabling us to attract and retain talented executives,” XPO said.
The aforementioned filing said that XPO made changes to the executive compensation program over the past year in response to stockholder feedback.
“Stockholders have expressed concern that awards based on all-or-nothing goals have the potential to incentivize risk-taking,” Jacobs wrote in an April 13 letter announcing XPO’s annual meeting. “In response, the 2020 LTI (long-term cash incentive) award has a sliding scale payout, as well as three separately weighted metrics.”
Jacobs added that, based on feedback from stockholders, the company has begun basing awards metrics relative to peers, and incorporating environmental, social, governance (ESG) metrics into executive pay.