FedEx expects DRIVE transformation to generate $4B of cost reductions in FY25

The DRIVE transformation spans 14 domains across four major areas: Customer, Surface Network, Air Network & International, and General and Administrative. FedEx expects DRIVE to generate $4B of permanent cost reductions in fiscal 2025. Each area is expected to generate savings in fiscal 2025 as follows: $1.2B in Surface Network, $1.3B in Air Network & International and $1.5B in General & Administrative. DRIVE is also enabling the implementation of Network 2.0, which is expected to generate an incremental $2B of savings in FY27. FedEx continues to project costs of up to $2B by the end of fiscal 2025 to implement its business optimization initiatives including the DRIVE and Network 2.0 programs. Additionally, the FedEx board of directors approved an increase in the annual dividend rate on its common stock of 10%, or 44c per share, to $5.04 per share for fiscal 2024. The board declared a quarterly cash dividend of $1.26 per share of FedEx common stock. The dividend is payable July 3 to stockholders of record at the close of business on June 12. The company also announced that its cash-based long-term incentive, or LTI, plan for FY24 through fiscal FY26 will include a return on invested capital, or ROIC, performance metric that will replace the capital expenditures as percentage of revenue performance metric used in recent LTI plans. This change is designed to further align management compensation with stockholder value, with ROIC being a key metric by which to measure the long-term success of FedEx.