UPS, like other public companies, has a stock incentive program “with the goal of motivating and rewarding management for operational and financial success, while helping to align with shareowner interests and returns,” according to the filing.
UPS said in a written statement on Monday that its executive compensation “reflects a commitment to drive organizational performance by tying a significant portion of pay to company results,” and that its executive pay is at the midpoint compared to other companies with a similar size and global scale. The company said Tomé “continues to deliver results” in the face of challenging economic conditions.
For the stock awards, the figures are estimates of their value; the actual amount an executive receives depends on the company’s stock price changes over time. The company’s long-term equity incentive program awards are made based on earnings per share growth and adjusted free cash flow.
UPS reported $11.55 billion in net income for 2022, down 10.4% compared with 2021, as it saw a decline in non-cash pension gains. Its earnings per share and cash flow also declined. Looking forward, economic uncertainty is weighing on companies, including UPS, which relies on the strength of commerce and global trade for its business.
Other executives also saw a decline in their total compensation. Chief Financial Officer Brian Newman had $7.2 million in total compensation, down from $15.3 million the previous year.
Some shareholders of the world’s largest shipper, meanwhile, want the UPS board to address several issues ahead of its annual meeting, including questions involving access to reproductive rights and impacts from climate change.
In all, seven shareholder proposals were listed in which owners of stock may vote this year.
They include three proposals seeking reports on UPS’s climate change strategy, greenhouse gas emissions reduction targets and tying such targets to executive compensation. Two proposals seek reports on UPS’s diversity, equity and inclusion efforts. One seeks to reduce the voting power of UPS class A stock. UPS recommended votes against all of the shareholder proposals.
One proposal from shareholder activist firm Arjuna Capital seeks a report on the risks or costs caused by state policies restricting reproductive rights. The proposal says employers and employees “bear the cost of restricted access to reproductive health care.”
A post by law firm WilmerHale last fall said investors last year began pressing some companies to respond to the implications of reduced abortion access. WilmerHale also warned last year that companies should expect shareholders to submit more reproductive health-related proposals in 2023.
UPS, which recommended a vote against the proposal, said the regulatory issues it focuses on as a logistics company are “fair taxation, commercially reasonable regulation, expansive trade, and a level playing field with competitors.” It also said the proposal is framed so broadly that it would be difficult for a large international company to create a useful document.
Georgia’s abortion law — which took effect when a U.S. Supreme Court decision last June overturned the national law established by Roe v. Wade — prohibits most abortions once a doctor can detect fetal cardiac activity, which is typically about six weeks into a pregnancy and before many know they are pregnant. Many other states have also passed laws severely restricting abortions.
UPS said it encourages its employees “to exercise their right to vote and inform their elected officials of their views on all issues through the democratic process.”