Dive Brief:
- FedEx Corporation CFO John Dietrich will step down from the shipping firm’s top finance seat effective June 1, the company announced in a Monday press release and securities filing. His departure will coincide with the spin-off of its FedEx Freight business, which offers “less-than-truckload” shipping to industrial customers, into its own publicly-traded entity, according to the release.
- Claude Russ, currently FedEx’s enterprise vice president of finance, will step in as interim CFO also as of June 1, while the company “conducts a comprehensive internal and external search for a successor,” according to the release.
- Dietrich’s resignation comes on the heels of FedEx Freight’s inaugural investor day on April 8, where leadership laid out growth targets and revenue expectations for the soon-to-be independent business. The LTL company this year expects to generate $8.7 billion in revenue, as well as about $1.1 billion in adjusted operating income, FedEx Freight President and CEO John Smith said during the call, according to a transcript.
Dive Insight:
Russ will continue to serve in his current role in addition to assuming interim CFO responsibilities as of June 1, the company said in a Monday filing with the Securities and Exchange Commission.
A long-time FedEx executive, Russ has served in several leadership positions during his 24-year span at FedEx, including CFO of FedEx Freight and SVP of revenue management at FedEx Services, according to his LinkedIn profile.
He took on his current role as EVP of finance in 2023, where he oversees the company’s global financial planning and analysis team, as well as the finance components of its “DRIVE” transformation initiative, according to the release.
“As we begin the search for John’s successor, I am confident that Claude’s wealth of experience will ensure seamless continuity and commitment to advancing our strategy,” FedEx President and CEO Raj Subramaniam said in a statement included in the release.
Russ will receive a $25,000 monthly cash payment for each month that he serves in the interim CFO seat, FedEx said in the SEC filing. Additionally, he will also receive a one-time special award of restricted stock units with a value of $50,000, to vest over a three-year period.
Dietrich joined the Memphis, Tennessee-based shipping and logistics business in June 2023 as its CFO, after spending more than two decades at Atlas Air, according to his LinkedIn profile.
The company expects to enter into a separation agreement with Dietrich regarding compensation arrangements pertaining to his departure, which was not the result of any disagreement with the business, FedEx said in the SEC filing.
Dietrich has helped to steer FedEx’s financial ship as the shipping firm moved forward with its planned freight spinoff, announcing its intent to form a new independent entity on Dec. 19, 2024, according to a summary posted on its website.
With the spinoff, FedEx Freight is poised to become North America’s largest LTL carrier, with Smith noting the company is already an “established leader” in the space — a segment of shipping with a high barrier of entry, he said. LTL refers to a practice where a certain client’s goods only take up a portion of a truck’s space, meaning the provider can fill the truck with products from multiple vendors and ship them more economically.
Marshall Witt, CFO of FedEx Freight, also anticipates that the to-be-formed company has a high potential for growth.
“Our adjusted operating income is expected to grow faster than revenue at a 10% to 12% CAGR, demonstrating expanded profitability,” he said during the April 8 investor day.
