The company did not return a request for comment on Bronczek's departure, as the policy change would mean that he would not succeed Smith anytime soon. A statement released last night indicates that Bronczek made a "personal decision" to retire. In a report filed yesterday with the SEC, FedEx stated that Bronczek's decision was not based on any disagreement with the company's "operations, policies and procedures".
Bronczek's photo no longer appears on the FedEx website page, where its leaders appear. He has also retired from his position as Director at International Paper Co. (NYSE: IP).
According to the document filed yesterday, Bronczek will receive a cash payment of $ 2.5 million in exchange for entering into a five-year non-compete agreement.
Bronczek's retirement paves the way for another Smith protégé, Raj Subramaniam, who will become his heir. On March 1, Subramaniam, 52, will become President and COO of FedEx. Subramaniam will continue to serve as President and Chief Executive Officer of FedEx Express, the largest air and ground unit where he took office on January 1st. He will also remain co-chairman and co-CEO of FedEx Services, which provides services to the various units. Like Bronczek, Subramaniam has been with FedEx for more than 27 years and has held many senior positions with the company.
Satish Jindel, director of the consulting firm ShipMatrix, said that Subramaniam was a very effective leader who shares Smith's vision, namely "it will bring more rapid change in all these organizations with more hands-on participation."
Subramaniam will have his hands full. In December, FedEx released its second quarter results and lowered its outlook for the 2019 fiscal year due to issues integrating its TNT Express unit and economic weakness in Europe and Asia. The weakness of these markets has continued, said in a note today Benjamin J. Hartford, Transportation Analyst for Baird Investment Company. Hartford maintained a higher rating than FedEx, but reduced its earnings per share estimates for 2019 and 2020.