FedEx Fred Smith Turns Over The Key to New Delivery Guy
In his first interview since being named CEO-elect of FedEx, Raj Subramaniam talks about preparing for a high-profile succession and setting a path for what’s next.
Raj Subramaniam had just set down his bags after returning home to Memphis from a trip to the Mayo Clinic for a routine check-up when his phone rang. It was FedEx chairman and CEO Frederick W. Smith, a half-hour early for their scheduled call—“FedEx time,” Subramaniam quips—saying he wanted to tell the board he was ready to pass the baton.
“Are you ready?” Smith asked.
Subramaniam said he was. “I had kind of mentally prepared for the moment to come, even though anytime that happens it’s always going to be a surprise,” he told Forbes in his first interview since being named CEO-elect at the end of March. “The second thing I felt was a huge sense of accountability and responsibility.”
It’s easy to see why. Subramaniam, 56, knows that many eyes will be tracking his every move when he steps into the top job on June 1. He is, after all, replacing an iconic leader who remains a vocal champion for U.S. business at 77 and has led FedEx since founding it in 1971. As CEO, Subramaniam will also be one of the most prominent Indian-born leaders to occupy the C-suite.
Although widely viewed as heir apparent since being named president and chief operating officer in 2019, the IIT-educated Subramaniam brings a different style than Smith, the visionary founder, former Marine rifle-platoon leader and billionaire whose net worth Forbes has valued at $4.5 billion. “If someone had told me when I joined this company 30 years ago that this is the role I would be playing, I would have thought I'd have a better chance to play for the Memphis Grizzlies,” Subramaniam says of FedEx’s hometown NBA team.
In one of the most closely watched successions in years—Smith’s CEO tenure outlasts all but Warren Buffett’s in the S&P 500, according to the Conference Board—Subramaniam will now be the one charged with checking up on FedEx’s health. He takes over as the logistics giant has been wrestling with higher labor costs, squeezed profit margins and a shift from commercial to e-commerce packages, facing stiff competition not only from its chief rival, UPS, but from Amazon. Since February 2019, as the S&P 500 soared more than 50%, the stock price of UPS rose 77% while FedEx shares lagged, rising just 13%.
