EXHIBIT 10.57
Compensation Arrangements with Named Executive Officers
Base Salaries
The following table sets forth the annual base salaries of FedEx’s named
executive officers:

          Name and       Current Position   Base Salary  
 
       
Frederick W. Smith
  $ 1,266,960  
Chairman, President and
Chief Executive Officer
       
 
       
Alan B. Graf, Jr.
  $ 902,784  
Executive Vice President and
Chief Financial Officer
       
 
       
David J. Bronczek
  $ 942,096  
President and Chief Executive Officer —
FedEx Express
       
 
       
T. Michael Glenn
  $ 833,364  
Executive Vice President,
Market Development and
Corporate Communications
       
 
       
Robert B. Carter
  $ 762,960  
Executive Vice President,
FedEx Information Services and
Chief Information Officer
       

Mr. Smith’s base salary is effective as of July 16, 2011. The base salaries of
the other named executive officers were effective as of July 1, 2011.
Fiscal 2012 Annual Incentive Compensation Program
Chairman, President and Chief Executive Officer
Frederick W. Smith’s fiscal 2012 annual bonus will be based on the achievement
of corporate objectives for consolidated pre-tax income for fiscal 2012. The
independent members of the Board of Directors, upon the recommendation of the
Compensation Committee, may adjust Mr. Smith’s bonus amount upward or downward
based on their annual evaluation of Mr. Smith’s performance, including the
quality and effectiveness of his leadership and the following corporate
performance measures:

  •   FedEx’s stock price performance relative to the Standard & Poor’s 500
Composite Index, the Dow Jones Transportation Average, the Dow Jones Industrial
Average and competitors;

  •   FedEx’s stock price to earnings (P/E) ratio relative to the Standard &
Poor’s 500 Composite Index, the Dow Jones Industrial Average and competitors;

  •   FedEx’s market capitalization;

 

 

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  •   FedEx’s revenue and operating income growth (excluding certain unusual
items) relative to competitors;

  •   FedEx’s free cash flow (excluding business acquisitions), return on
invested capital (excluding certain unusual items), and weighted average cost of
capital;

  •   Analyst coverage and ratings for FedEx’s stock;

  •   FedEx’s U.S. and international revenue market share; and

  •   FedEx’s reputation rankings by various publications and surveys.

None of these factors will be given any particular weight in determining whether
to adjust Mr. Smith’s bonus amount.
Mr. Smith’s annual bonus target for fiscal 2012 is 130% of his annual base
salary (at fiscal year-end), with a maximum payout of 300% of his target bonus.
Non-CEO Named Executive Officers
The fiscal 2012 annual bonus target payouts for the non-CEO named executive
officers, as a percentage of annual base salary (at fiscal year-end), are as
follows:

          Name   Target Payout  
 
       
Alan B. Graf, Jr.
    90 %
David J. Bronczek
    100 %
T. Michael Glenn
    90 %
Robert B. Carter
    90 %

The maximum payout for each executive is 240% of his target bonus.
The fiscal 2012 annual bonus for the non-CEO named executive officers will be
based on:

  •   the achievement of individual objectives established at the beginning of
the fiscal year for each executive (30% of each executive’s target bonus); and

  •   the achievement of corporate objectives for consolidated pre-tax income
for fiscal 2012 (70% of each executive’s target bonus).

The annual bonus payout opportunity relating to individual performance will be
contingent upon achievement of consolidated pre-tax income objectives under the
bonus plan (as well as achievement of the individual performance objectives).
Mr. Smith will determine the achievement level of each executive’s individual
objectives at the conclusion of fiscal 2012.
Company Financial Performance Measure
The annual bonus payout opportunity relating to company financial performance
for each named executive officer ranges, on a sliding scale, from a minimum
amount if the annual bonus plan’s pre-established consolidated pre-tax income
threshold is achieved up to a maximum amount if such financial performance goal
is substantially exceeded. Ordinarily, our business plan objective for
consolidated pre-tax income is the target under the annual bonus plan. In
keeping with our pay-for-performance philosophy, our fiscal 2012 annual bonus
plan design seeks to reward employees for their motivation during lean economic
times and for improved company performance. Accordingly, the fiscal 2012 target
objective for the company performance factor under the annual bonus plan is less
than the fiscal 2012 business plan objective for consolidated pre-tax income.

 

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Long-Term Incentive Program
FedEx’s long-term incentive (“LTI”) plans for the three-fiscal-year periods 2010
through 2012, 2011 through 2013 and 2012 through 2014, provide long-term cash
bonus opportunities to members of upper management, including the named
executive officers, upon the conclusion of fiscal 2012, 2013 and 2014,
respectively, if certain aggregate fully diluted earnings per share (“EPS”)
goals established by the Board of Directors are achieved with respect to those
periods. No amounts can be earned for the fiscal 2010 through 2012, 2011 through
2013 and 2012 through 2014 plans until 2012, 2013 and 2014, respectively,
because achievement of the EPS goals can only be determined following the
conclusion of the applicable three-fiscal-year period.
Traditionally, the base-year number over which the three-year average annual EPS
growth rate goals are measured for an LTI plan is the final full-year EPS of the
preceding fiscal year. For the fiscal 2010 through 2012 LTI plan, however, an
adjusted base-year number ($2.93) was used rather than the final fiscal 2009
EPS. This adjusted base-year number was set so that 12.5% growth from the number
would equal the fiscal 2010 business plan EPS goal.
The following table sets forth the potential future payouts to each of FedEx’s
named executive officers under FedEx’s LTI plans:

                                              Potential Future Payouts      
Performance     Threshold     Target     Maximum   Name   Period     ($)     ($)
    ($)  
 
                               
Frederick W. Smith
  FY2010–FY2012     875,000       3,500,000       5,250,000  
 
  FY2011–FY2013     875,000       3,500,000       5,250,000  
 
  FY2012–FY2014     1,000,000       4,000,000       6,000,000  
 
                               
Alan B. Graf, Jr.
  FY2010–FY2012     300,000       1,200,000       1,800,000  
 
  FY2011–FY2013     300,000       1,200,000       1,800,000  
 
  FY2012–FY2014     300,000       1,200,000       1,800,000  
 
                               
David J. Bronczek
  FY2010–FY2012     375,000       1,500,000       2,250,000  
 
  FY2011–FY2013     375,000       1,500,000       2,250,000  
 
  FY2012–FY2014     375,000       1,500,000       2,250,000  
 
                               
T. Michael Glenn
  FY2010–FY2012     300,000       1,200,000       1,800,000  
 
  FY2011–FY2013     300,000       1,200,000       1,800,000  
 
  FY2012–FY2014     300,000       1,200,000       1,800,000  
 
                               
Robert B. Carter
  FY2010–FY2012     300,000       1,200,000       1,800,000  
 
  FY2011–FY2013     300,000       1,200,000       1,800,000  
 
  FY2012–FY2014     300,000       1,200,000       1,800,000  

 

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The potential individual future payouts set forth in the table above are set
dollar amounts ranging from threshold (minimum) amounts, if the EPS goal
achieved is less than target, up to maximum amounts, if the plan goal is
substantially exceeded. There can be no assurance that the potential future
payouts shown in this table will be achieved.

 

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