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The International Brotherhood of Teamsters, alongside other international unions, are raising concerns about the excessive compensation package of XPO Logistics CEO Bradley Jacobs;
With Jacobs in line to receive up to $80 million under a new award, the unions are alerting shareholders and the public of the estimated £100 million the company claimed as pandemic relief in the U.K.
(WASHINGTON) – Following several recent “Say-on-Pay” defeats in recent weeks, the International Brotherhood of Teamsters is calling on shareholders to vote against the compensation package proposal (Item 3) at XPO Logistics (NYSE: XPO) annual shareholders meeting on Tuesday. In a recent letter to XPO’s shareholders, the union urged investors to vote for additional reforms including, the appointment of an independent chair (Item 5) and against the re-election of the incumbent members of the Compensation Committee: Michael Jesselson, Jason Papastavrou and Marlene Colucci (Item 1). Leading proxy advisory firms, Glass Lewis and Institutional Shareholder Services are joining the Teamsters in objecting to the company’s pay practices.
XPO Logistics, headquartered in Greenwich, Conn., markets itself as a global leader in providing transport, logistics and last mile delivery services. It provides these services to internationally recognized companies, including Apple, ASOS, Home Depot, IKEA, Nestle, Nike, Peloton, Starbucks and Verizon.
The company has seen pay revolts in three of the last four years, meaning that there has been more than 30% opposition to the company’s “Say-On-Pay” proposals. Now, the company has granted CEO Bradley Jacobs an incentive award of up to $80 million, despite estimations that the company received more than £100 million from the U.K. Government in pandemic relief, based on an analysis of claims made public by the U.K. Government for the months December 2020 through February 2021.[i] Meanwhile, XPO workers in the U.K. risked their health throughout the pandemic or were furloughed at the taxpayers’ expense receiving only 80% of their wages.
“There are countless reasons why XPO shareholders should be furious about the excessive pay package of CEO Bradley Jacobs,” said Ken Hall, International Brotherhood of Teamsters General Secretary-Treasurer. “If XPO’s mistreatment of its workforce and its concerning response to the COVID-19 pandemic are not enough for shareholders, then investors should look at the company’s continued use of large ad hoc awards that are simply outsized for this company. Now is the time to vote for serious reforms at XPO after years of the company dumping money into one man’s pockets.”
XPO is set to spin off the logistics arm of the business in a move that is expected to further enrich Jacobs, who will own 17% of both companies, as disclosed ahead of the company’s shareholders meeting on May 11. In December, as a prelude to the transaction, the company paid Jacobs $20 million in exchange for future dividend rights he held.
The new company, GXO, will be headquartered in London with ambitions to grow its current portfolio by continuing its strategy of mergers, acquisitions and take-overs, including a major contract expansion with online retailer ASOS, whose pre-existing XPO-run Barnsley warehouse GMB union dubbed ‘a cradle of disease’ likening working conditions to that of a ‘satanic mill.’ The company also holds a five-year agreement with the U.K. government, which commenced in March 2021, to store goods and vehicles for the U.K. Border Force.
Additional calls for reform stem from a report released in October 2020 (XPO: Delivering Injustice) that exposed the company’s negligent COVID-19 response and deadly outbreaks in its facilities. The report also details how XPO subjects its employees to wage theft and exploitation, hazardous work environments riddled with health and safety violations, pregnancy and gender discrimination, sexual harassment and extreme anti-union tactics.
XPO: Delivering Injustice is the first report released examining the logistics company’s treatment of thousands of workers worldwide and was compiled by the XPO Global Union Family after extensive conversations with workers around the globe. The XPO Global Union Family is led by The International Transport Workers’ Federation (ITF), The European Transport Workers’ Federation (ETF), and the International Brotherhood of Teamsters (IBT), and includes the following unions and worker organizations: ABVV-BTB (Belgium), ACV-CSC Transcom (Belgium), CGT Transports (France), FeSMC-UGT (Spain), FGTE-CFDT (France), GMB (Britain), Uiltrasporti (Italy), Unia (Switzerland), Unite (Britain) and UNSA Transport (France).
Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women throughout the U.S., Canada and Puerto Rico. Visit www.teamster.org for more information. Follow us on Twitter @Teamsters and “like” us on Facebook at www.facebook.com/teamsters.
[i] UK HMRC figures on claims made by all companies under the UK government Coronavirus Job Retention Scheme (‘the Scheme’) have been published in full for the months of December 2020 to February 2021. This public data reveals claims made by a number of companies under the ownership of XPO Logistics. XPO Logistics Drinks Limited, which changed ownership from Kuehne and Nagel in January 2021 is also included in our calculations as a beneficiary of the scheme. The lowest known potential amount claimed, from figures published December 2020, and the highest known potential claimed, from figures published February 2021, have been used to calculate an average monthly claim over the entire period of the Scheme. XPO claimed at least £3.28 million in December 2020 and up to £10.5 million in February 2021. If this figure is averaged over the period of the scheme to date then XPO will have received more than £100 million. As the figures published relate only to claims made in later stages of the pandemic, we estimate that the actual total amount claimed may likely be much higher. UK unions are aware that XPO has been furloughing staff since the beginning of the crisis.