By Dhirendra Tripathi
Investing.com – FedEx (NYSE:FDX) stock traded 2.6% higher in premarket Tuesday after the company said its President and Chief Operating Officer, Raj Subramaniam, will take over as President and Chief Executive Officer with effect from June 1.
Subramaniam will replace Frederick W. Smith who will now be the company’s Executive Chairman.
Prior to his current role, Subramaniam was President and CEO of FedEx Express, the world’s largest express transportation company. Subramaniam, who joined the company in 1991, is being named CEO-elect effective immediately.
Smith founded the company in 1971 when he bought controlling interest in Arkansas Aviation Sales to give birth to a concept paper he had written at Yale University in 1965 on airfreight shippers and their challenges. FedEx was officially born two years later.
While FedEx rode the COVID-19-led boom for quick deliveries as customers shopped for everything online, its overall growth trajectory has trailed rival UPS last few years. That was reflected in the stock prices. FedEx is down 18% in the last year while UPS (NYSE:UPS) is up almost 31% in the same period. S&P is up over 15%.
There wasn’t a clamor for Smith stepping down though, and the succession was planned, only delayed by the pandemic.
FedEx said it would keep the Chief Operating Officer role, traditionally seen as the next in line to CEO, vacant for now.