Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant
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Preliminary Proxy
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Confidential, for Use of the
Commission Only (as permitted by Rule 14a-6(e)(2))
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[X]
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Definitive Proxy
Statement
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[ ]
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Definitive Additional
Materials
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Soliciting Material Pursuant to §240.14a-12
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United Parcel Service, Inc.
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(Name of Registrant as
Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment of Filing Fee (Check
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Table of Contents
Notice of 2017 Annual Meeting
of Shareowners and
Proxy Statement
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Thursday, May 4, 2017
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8:00 a.m. Eastern Time
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The Hotel du Pont
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Wilmington,
Delaware
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Scan this QR code with your smartphone
or tablet for access
to the Proxy Materials
and Annual Report.
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Table of Contents
Table of
Contents
www.upsannualmeeting.com
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3
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Table of Contents
United Parcel
Service, Inc.
55 Glenlake Parkway, N.E.
Atlanta, GA
30328
March 13, 2017
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Dear
Shareowners:
It is my pleasure to invite you to join
us at UPSs 2017 Annual Meeting of Shareowners. Since our last Annual Meeting we
had the opportunity to celebrate the 40th anniversary of our operations in
Europe, and in August we will recognize UPSs 110th anniversary. We are proud of
our history, which is built on a foundation of continuous improvement in our
global integrated network and our broad portfolio of customer
solutions.
As we move forward, our business
continues to evolve as the pace of change around the globe increases. Shifting
trade patterns, e-commerce growth and demand for specialized solutions all
create exciting opportunities for our Company. We are focused on strategic
investments in our business that improve efficiency, increase flexibility and
provide more value to our customers and shareowners. Strategic partnerships,
acquisitions, targeted industry solutions, and increased technology investments
are all important to our strategy as we transform our network to provide
customer solutions and capitalize on e-commerce and international growth.
Our financial strength enables us to
make the necessary investments and to continue building on our leadership
position. These investments will promote the long-term success of the Company
and help UPS navigate the significant changes in global economic, social and
political conditions.
UPSs Board of Directors is central to
our long-term strategy. Our Board oversees our risk management processes and our
growth strategy. I encourage you to read the Risk Oversight and Strategic
Planning sections of this Proxy Statement for additional information.
Finally, I want to encourage all of our
shareowners to vote. This is your opportunity to share your views with the
Company. We listen and take your feedback into account as we continually seek to
grow our business, improve governance and increase shareowner value. We are
grateful to those shareowners who have previously shared their views. As we
approach the Annual Meeting, I encourage you to contact us with any questions or
feedback at 404-828-6059.
On behalf of the entire Board of
Directors, thank you for your continued support of UPS.
David P. Abney
Chairman and Chief Executive Officer
4
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Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
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Table of Contents
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Notice of UPS 2017 Annual Meeting
UNITED PARCEL SERVICE, INC.
55 Glenlake Parkway, N.E., Atlanta, Georgia
30328
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Date and Time:
May 4, 2017, at 8:00 a.m. Eastern Time
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Place:
Hotel du Pont, 11th and
Market Streets, Wilmington, Delaware
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Record
Date:
March 6, 2017
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Distribution Date:
A Notice of
Internet Availability of Proxy Materials or the Proxy Statement is first
being sent to shareowners on or about March 13, 2017
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Voting:
Holders of class A common stock are entitled to ten
votes per share; holders of class B common stock are entitled to one vote
per share
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Admission:
To attend the meeting in person you will need proof of
your share ownership (see page 67 for acceptable proof of ownership) as of
the record date and a form of government-issued photo identification
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Your vote is important. Please vote
as soon as possible by using the Internet, by telephone or by signing and
returning your proxy card if you received a paper copy of the proxy card by
mail. Your voting options are described on the Notice of Internet Availability
of Proxy Materials or proxy card.
Important Notice Regarding the
Availability of Proxy Materials for the Shareowner Meeting to be held on May 4,
2017. The Proxy Statement and our 2016 Annual Report are available at
www.proxyvote.com. You may also view the Proxy Statement and other materials
about the 2017 Annual Meeting at www.upsannualmeeting.com.
Questions? Call 404-828-6059 (option 2).
Norman M. Brothers, Jr.
Secretary
Atlanta,
Georgia
March 13, 2017
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Voting
Choices
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Board Voting
Recommendations
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Page
(for more
information)
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Company Proposals:
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1.
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Elect 12 directors named in this Proxy Statement to serve until the
2018 Annual Meeting and until their respective successors are elected and
qualified
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Vote for all nominees
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Vote against all nominees
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Vote for some nominees and against
others
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Abstain from voting on one or more
nominees
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FOR ALL
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21
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2.
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Approve an advisory resolution on executive
compensation
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Vote for the approval of executive compensation
on an advisory basis
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Vote against the approval of executive
compensation on an advisory basis
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Abstain from voting on the
proposal
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FOR
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52
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3.
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Approve an advisory vote on the frequency of future advisory votes to approve executive compensation
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Vote for an advisory vote on executive
compensation every three years (triennial) on an advisory basis
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Vote for an advisory vote on executive
compensation every two years (biennial) on an advisory basis
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Vote for an advisory vote on executive
compensation every year (annual) on an advisory basis
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Abstain from voting on the
proposal
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TRIENNIAL
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52
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4.
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Ratify the appointment of Deloitte and Touche LLP as our
independent registered public accounting firm for 2017
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Vote for ratification
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Vote against ratification
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Abstain from voting on the
proposal
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FOR
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57
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Shareowner Proposals (if properly
presented):
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5.
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Prepare an annual report on lobbying activities
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Vote for the proposal
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Vote against the proposal
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Abstain from voting on the
proposal
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AGAINST
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59
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6.
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Reduce the voting power of class A stock from ten votes per share
to one vote per share
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Vote for the proposal
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Vote against the proposal
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Abstain from voting on the
proposal
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AGAINST
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61
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7.
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Adopt Holy Land Principles
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Vote for the proposal
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Vote against the proposal
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Abstain from voting on the
proposal
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AGAINST
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62
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www.upsannualmeeting.com
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5
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Table of Contents
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Proxy Statement
Summary
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This Proxy Statement contains important
information on company matters that require your vote. We are furnishing these
proxy materials because you own shares of United Parcel Service, Inc. common
stock and our Board of Directors is soliciting your proxy to vote your shares at
the Annual Meeting. We are first mailing this Proxy Statement to our shareowners
on or about March 13, 2017. All properly executed written proxies, and all
properly completed proxies submitted by telephone or the internet, that are
delivered pursuant to this solicitation will be voted at the meeting in
accordance with the directions given in the proxy, unless the proxy is revoked
prior to completion of voting at the meeting. Only owners of record of shares of
the Companys common stock as of the close of business on March 6, 2017, the
Record Date, are entitled to notice of, and to vote at, the meeting and any
adjournment or postponement of the meeting. The Annual Meeting will be held May
4, 2017, at 8:00 a.m. Eastern Time at The Hotel du Pont, 11th and Market
Streets, Wilmington, Delaware.
Corporate Governance
Highlights
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A brief overview of some of our corporate
governance policies and practices is below:
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The board has a Risk Committee
comprised entirely of independent board members that is responsible for
assisting in overseeing managements identification and evaluation of
enterprise risks. The Risk Committee met three times during
2016;
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We have a highly engaged lead
director with significant oversight responsibilities;
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During 2016, the Nominating and
Corporate Governance Committee improved its process for identifying,
screening and recruiting director candidates;
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All of our directors are
independent, other than our CEO;
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We provide for majority voting in
uncontested director elections;
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All directors are elected
annually;
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Independent directors meet regularly
without management;
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The board conducts an in depth
review of company strategy on an annual basis; and
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The board and each board committee
conduct self-evaluations
annually.
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Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
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Table of Contents
The Board of Directors is asking you to
elect 12 nominees for director. The table below provides summary information
about the director nominees. The Company utilizes a majority voting standard
which means that a nominee will only be elected if the number of votes cast for
the nominees election is greater than the number of votes cast against that
nominee. For more information see pages 12 and 15.
Name
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Age
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Director
Since
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Occupation
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Committee(s)
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Other
Public
Company
Boards
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Independent
Directors
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Rodney C. Adkins
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58
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2013
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Former Senior Vice President of Corporate Strategy,
International Business Machines
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Risk (Chair)
Compensation
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3
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Michael J. Burns
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65
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2005
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Former Chairman, Chief Executive Officer and President, Dana
Corporation
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Audit
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0
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William R. Johnson
(lead director)
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68
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2009
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Former Chairman, President and Chief Executive Officer, H.J.
Heinz Company
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Nominating and Corporate Governance
(Chair)
Executive
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2
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Candace Kendle
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70
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2011
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Co-founder and Former Chairman and Chief Executive Officer,
Kendle International Inc.
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Audit
Risk
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1
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Ann M. Livermore
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58
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1997
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Former Executive Vice President, Hewlett-Packard
Company
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Compensation (Chair)
Risk
Executive
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2
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Rudy H.P. Markham
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71
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2007
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Former Financial Director, Unilever
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Audit
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3
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Franck J. Moison
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63
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2017
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Vice Chairman, Colgate-Palmolive Company
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Nominating and Corporate
Governance
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1
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Clark T. Randt, Jr.
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71
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2010
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Former U.S. Ambassador to the Peoples Republic of
China
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Compensation
Nominating and Corporate
Governance
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3
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John T. Stankey
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54
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2014
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CEO, AT&T Entertainment Group
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Nominating and Corporate
Governance
Risk
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0
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Carol B. Tomé
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60
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2003
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Chief Financial Officer and Executive Vice President
Corporate Services, The Home Depot, Inc.
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Audit (Chair)
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0
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Kevin M. Warsh
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46
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2012
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Former Member of the Board of Governors of the Federal
Reserve System, Distinguished Visiting Fellow, Hoover Institution,
Stanford University
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Compensation
Nominating and Corporate
Governance
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0
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Non-Independent
Director
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David P. Abney
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61
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2014
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Chairman and Chief Executive Officer, United Parcel Service,
Inc.
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Executive (Chair)
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1
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www.upsannualmeeting.com
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7
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Table of Contents
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Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
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Table of Contents
Shareowner Returns
UPS is
committed to investing in the business in ways that increase capacity, improve
efficiency, promote growth in global markets and capitalize on opportunities to
improve the business.
The Company is also committed to
returning excess cash to shareowners. Under the Companys balanced approach,
dividends are a priority while share repurchases represent a discretionary use
of cash only after meeting the needs of the business. The following graphs
highlight our returns to shareowners:
Annual Cash
Dividends
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Shares
Repurchased
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(in dollars per share)
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(in billions of dollars)
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www.upsannualmeeting.com
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9
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Table of Contents
2016 Compensation Actions Summary
Key
compensation decisions for the Named Executive Officers (NEOs) for 2016
include the following:
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Most of our NEOs total direct compensation is performance-based
and is considered at risk (90% for the CEO and 86% for all other NEOs as a group).
See page 31;
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In order to ensure that total compensation at UPS remains
competitive with peer group companies, the Compensation Committee approved
certain executive compensation changes in September 2016. See page
37;
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As a result of the annual performance review process, base salaries
of the NEOs were increased by an average of 4.1%. Certain NEOs also
received an additional 10% base salary increase in October. See page
33; and
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The 2014 LTIP awards,
which had three-year performance goals ending in 2016, were earned at 72%
of target based on revenue growth, operating return on invested capital
and relative total shareowner return. See page
38.
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Compensation Practices
Our
compensation programs are designed to align executive decision-making with the
long-term interests of our shareowners. A significant portion of executive pay
is tied to company performance over a multi-year period. We also have a
long-standing owner-manager culture. Other compensation and governance practices
that support these principles include the following:
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We do not have employment agreements with executive
officers;
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We do not have separate change in control or severance agreements
with executive officers;
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We do not provide tax gross-ups to executive officers with respect
to equity awards;
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Our compensation practices provide a balanced mix of cash and
equity, annual and longer-term incentives, and performance metrics which
mitigate excessive risk-taking;
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Our 2015 Incentive Compensation Plan (2015 Plan) includes
clawback provisions that permit us to recover awards granted to executive
officers;
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Our 2015 Plan requires a double trigger both a change in
control and a termination of employment to accelerate the vesting of
unvested awards that are continued or assumed by the successor
entity;
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We have robust stock ownership guidelines that include a target
ownership of eight times annual salary for the Chief Executive Officer and
five times annual salary for other executive officers;
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We prohibit executive officers and directors from hedging their
ownership in UPS stock. Additionally, in 2014 we adopted a
policy prohibiting our executive officers and directors from entering into
future pledges of UPS stock;
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We use three-year performance goals for revenue growth, operating
return on invested capital and relative total shareowner return (TSR)
for our long-term incentive performance awards; and
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Our annual equity
awards vest 20% per year over a five-year
period.
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Say on Pay and Say on Pay Voting
Frequency
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We maintain an executive compensation program that supports the long-term
interests of our shareowners. The Board of Directors is asking you to approve on
an advisory basis the compensation of the Named Executive Officers, as described
in the Compensation Discussion and Analysis section and in the compensation
tables and accompanying narrative disclosure in the proxy statement beginning on
page 30.
The board is also asking you to approve
that future advisory votes to approve executive compensation be held every three years,
or on a triennial basis.
10
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Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
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Table of Contents
Ratification of the Appointment of the Independent
Registered Public Accounting Firm
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The board is asking you to ratify the
appointment of Deloitte & Touche LLP as our independent registered public
accounting firm for the fiscal year ending December 31, 2017. We have provided
summary information with respect to the fees billed for services provided to us
by Deloitte & Touche LLP during the fiscal years ended December 31, 2016 and
2015. For more information, see page 57.
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2016
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2015
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Fees Billed:
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Audit
Fees
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$
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14,493,000
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$
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13,939,000
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Audit-Related
Fees
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$
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1,380,000
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$
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1,351,000
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Tax
Fees
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$
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592,000
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$
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797,000
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Total
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$
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16,465,000
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$
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16,087,000
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The board is asking you to vote AGAINST
the shareowner proposals requiring an annual report on lobbying activities,
reducing the voting power of our class A stock and calling for the adoption of
the Holy Land Principles. For more information about the proposals, see information starting on page 59.
www.upsannualmeeting.com
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11
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Table of Contents
Our Board of Directors employs
practices that foster effective board oversight of critical matters such as
strategy, management succession planning, financial and other controls, risk
management and compliance. The board reviews our major governance documents,
policies and processes regularly in
the context
of current corporate governance trends, regulatory changes and recognized best
practices. The following sections provide an overview of our corporate
governance structure and processes, including key aspects of our board
operations.
Selecting Director Nominees
The
Nominating and Corporate Governance Committee is responsible for reviewing and
recommending director nominees to the board, including candidates to
fill
vacancies. When evaluating director candidates, the Nominating and
Corporate Governance Committee considers factors such as personal character,
values and disciplines, ethical standards, diversity, other outside commitments,
professional background and skills. This evaluation is done in the context of an
assessment of the needs of the board at the time. The boards annual
self-evaluation process also helps inform the Nominating and Corporate
Governance Committee as to areas the board believes it needs additional
expertise, skills or experience.
Each
director candidate is carefully evaluated to ensure that other existing and
planned future commitments will not materially interfere with his or her
responsibilities as a UPS director. The Nominating and Corporate Governance
Committees objective is to maintain a board of individuals of the highest
personal character, integrity and ethical standards. The Nominating and
Corporate Governance Committee also seeks candidates that reflect a range of
professional backgrounds and skills relevant to our business. Our director
biographies highlight the experiences and qualifications that were among the
most important to the Nominating and Corporate Governance Committee and the
board in concluding that the nominee should serve as a director of the
Company.
The
Nominating and Corporate Governance Committee may use a variety of sources to
identify candidates, including recommendations from independent directors or
members of management, search firms, discussions with other persons who may know
of suitable candidates and shareowner recommendations. Our newest director,
Franck Moison, was recommended by our lead independent director, William
Johnson. Evaluations of prospective candidates typically include a review of the
candidates background and qualifications by the Nominating and Corporate
Governance Committee, interviews with the
Committee as a whole, one or more members of the Committee, or one or more other
board members, and discussions of the Committee and the full board.
During
2016, the Nominating and Corporate Governance Committee improved its process for
identifying, screening and recruiting director candidates. The Committee hired
an outside consultant to advise and assist in the improvement of the process and
to provide an independent perspective of board candidates. The updated process
provides a framework for allowing active and ongoing consideration of potential
directors. With the assistance of the consultant, the Nominating and Corporate
Governance Committee conducted an in-depth board composition analysis to
identify a list of potential director candidates according to desired
competencies. The list of potential candidates is reviewed during each meeting
of our Nominating and Corporate Governance Committee. Candidates are added or
removed from the list after the meetings. The consultant helps evaluate
potential candidates and supports the recruitment process.
The Nominating and Corporate Governance
Committee considers shareowner proposed director candidates on the same basis as
recommendations from other sources. Shareowners who wish to recommend a director
candidate to the Nominating and Corporate Governance Committee may do so by
submitting the name of the prospective candidate in writing to the following
address: Corporate Secretary, 55 Glenlake Parkway, N.E., Atlanta, Georgia 30328.
Submissions should describe the experience, qualifications, attributes and
skills that make the prospective candidate a suitable director nominee. Our
Bylaws set forth the requirements for direct nomination by a shareowner of
persons for election to the Board of Directors. These requirements are described
under Other Information for Shareowners Shareowner Proposals and Nominations
for Director at the 2018 Annual Meeting on page 68.
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Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
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Table of Contents
Board Diversity
A variety of viewpoints contribute to a
more effective decision-making process. The Nominating and Corporate Governance
Committee considers diversity in identifying director nominees, including
personal characteristics such as race, gender, age and cultural background, as
well as diversity in experience and skills relevant to the boards performance
of its responsibilities in the oversight of a complex global business. The
Nominating and Corporate Governance Committee assesses the effectiveness of its
efforts at pursuing diversity through its periodic evaluation of the boards
composition. Our 12 director nominees include a diverse range of individuals,
including three women, one African-American, two nominees who are European and a
nominee who spent his entire career in Asia. We also have a great degree of age
diversity among our nominees, with our directors ages ranging between 46 and 71
years.
Director Nominee Diversity
(gender and race)
Board Refreshment and Succession
Planning
The Nominating and Corporate Governance
Committee regularly considers the long-term make up of our Board of Directors
and how the members of our board change over time. The Nominating and Corporate
Governance Committee also considers the experience needed for our board as our
business and the markets in which we do business evolve. Our board aims to
strike a balance between the knowledge that comes from longer-term service on
the board with the new experience, ideas and energy that can come from adding
directors to the board. Since 2009 we have added 7 new independent directors to
our board and have had 5 directors retire. We believe the average tenure for our
director nominees of approximately 7.7 years reflects the balance the board
seeks between different perspectives brought by long-serving directors and new
directors.
Director Nominee
Tenure
Director Independence
Our
Corporate Governance Guidelines include director independence standards that
meet the listing standards set forth by the New York Stock Exchange (NYSE),
which require a majority of our directors to be independent. Our Corporate
Governance Guidelines are available on the governance section of our investor
relations website at www.investors.ups.com.
The board reviewed the independence of
each director nominee in February 2017 and considered whether there were any
relationships between each director or any member of his or her immediate
family, and UPS. The board also examined whether there were any relationships
between an organization of which a director is a partner, principal shareowner
or executive officer, and UPS. This review allowed the board to determine
whether any such relationships were inconsistent with a determination that a
director is independent.
Independent Director
Nominees
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As a result of this review, the board
affirmatively determined that the following director nominees are independent:
Rodney Adkins, Michael Burns, William Johnson, Candace Kendle, Ann Livermore,
Rudy Markham, Franck Moison, Clark Randt, John Stankey, Carol Tomé and Kevin
Warsh. Accordingly, all of our director nominees, other than our Chairman and
Chief Executive Officer, David Abney, are independent. All directors on the
Audit, Compensation, Nominating and Corporate Governance and Risk Committees are
independent.
In determining the independence of
Michael Burns, John Stankey, Franck Moison, and Carol Tomé, our board considered
ordinary course business relationships between UPS and the organizations that
employed these directors or their immediate family members during 2016. The board determined
that none of these transactions were material to the Company, the individuals or
the organizations with which they were associated.
Board Leadership
The board selects the Chairman and the
Chief Executive Officer after receiving recommendations from the Nominating and
Corporate Governance Committee. The board evaluates and determines the most
appropriate leadership structure for UPS at any given time. The Nominating and
Corporate Governance Committee periodically evaluates and recommends whether or
not to separate or combine the roles of Chairman and Chief Executive
Officer.
The board determined that David Abney,
who has primary responsibility for managing the Companys day-to-day operations
and has extensive knowledge and understanding of the Company,
is best positioned to lead the board at this time and to focus
the boards attention on the issues of greatest importance to the Company and
its shareowners. Having our Chief Executive Officer serve as Chairman of the
Board also is consistent with the historical practice of UPS, as all ten of our
previous Chief Executive Officers have also served as Chairman of the Board, and
we believe that this leadership structure has been effective for the
Company.
Independent Board
Leadership
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The board also recognizes the
importance of independent oversight of the board. Accordingly, in February 2016,
the independent directors of the board appointed William Johnson as lead
independent director.
Our lead independent directors
leadership authority and responsibilities include:
●
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Presiding at meetings of the
board at which the Chairman is not present, including executive sessions
of the non-management and independent directors;
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●
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Approving information sent to the
board;
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Approving the agenda and schedule
for board meetings to provide sufficient time for discussion
of all agenda items;
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Serving as liaison between the
Chairman and the non-management and independent directors;
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●
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Being available for consultation
and communication with major shareowners upon request; and
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Having the authority to call
executive sessions of the non-management and independent
directors.
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Furthermore, all of the directors on
each of the Audit Committee, the Compensation Committee, the Nominating and
Corporate Governance Committee and the Risk Committee are independent. Each of
these committees is led by a chairperson who sets the agenda for the committee
and reports to the full board on the committees work. Additionally,
non-management directors meet in executive session without management present as
frequently as they deem appropriate, as discussed below. We believe that this
structure provides the best form of leadership for the Company and its
shareowners at this time.
Executive Sessions of Non-Management Directors
Our non-management directors hold
executive sessions without management present as frequently as they deem
appropriate, typically at the time of each regular board meeting. The lead
independent director determines the agenda for the session, presides at the
session and, after the session, acts as a liaison between the non-management
directors and the Chairman and
Chief Executive
Officer. The lead independent director may invite the Chairman and Chief
Executive Officer to join the session for certain discussions, as he or she
deems appropriate. If the non-management directors include in the executive
sessions any non-independent directors, then at least once a year an executive
session is held including only the independent directors.
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Board and Committee Evaluations
Our board
has a proven and detailed annual self-evaluation process. In addition, the
charters of each of the Audit Committee, Compensation Committee, Nominating and
Corporate Governance Committee and Risk Committee require an annual performance
evaluation. The Nominating and Corporate Governance Committee oversees the
annual self-assessment process on behalf of the board and the implementation of
the annual self-assessments by the committees.
All board
members and all members of the Audit, Compensation, Nominating and Corporate
Governance, and Risk Committees complete a detailed confidential questionnaire.
The questionnaire provides for quantitative ratings in key areas and also allows
directors to provide feedback and make detailed anonymous
comments. The Chair of the Nominating and Corporate Governance
Committee reviews the responses with the Chairs of the Audit, Compensation and
Risk Committees. The Chair of the Nominating and Corporate Governance Committee
also discusses the board self-evaluation with the full board. Matters requiring
follow-up are addressed by the Chair of the Nominating and Corporate Governance
Committee or the Chairs of the Audit, Compensation, or Risk Committee, as
appropriate.
Feedback from the evaluations has
driven several changes in board operations, including the format and timing of
board meeting materials, board meeting agendas and recurring topics, director
orientation and director recruitment practices.
Majority Voting and Director Resignation
Policy
Our Bylaws
provide for majority voting in uncontested director elections. Under the
majority voting standard, directors are elected by a majority of the votes cast.
This means that in order to be elected the number of votes cast for a director
must exceed the number of votes cast against that director.
Any director who does not receive a
majority of the votes cast must offer to resign from the board. The Nominating
and Corporate Governance Committee will recommend to the board whether to accept
or reject the offer to resign. The Nominating and Corporate Governance Committee
will consider all relevant factors in making the recommendation. The board will
act on the Nominating and Corporate Governance Committees recommendation within
90 days following certification of the election
results. The board will take into account the factors considered by the
Nominating and Corporate Governance Committee and any additional relevant
information. Any director who offers to resign must recuse himself or herself
from the board vote, unless the number of independent directors who were
successful incumbents is fewer than three. The board will promptly disclose its
decision regarding any offer to resign, including its reasoning. If the board
determines to accept a directors offer to resign, the Nominating and Corporate
Governance Committee will recommend whether and when to fill such vacancy or
whether to reduce the size of the board.
Risk Oversight
Our board
is responsible for overseeing our management of risk. The board has a Risk
Committee comprised entirely of independent board members to assist in
overseeing managements identification and evaluation of enterprise risks. In
particular, the Risk Committee focuses on strategic enterprise risks including,
but not limited to, risks associated with technology, intellectual property and
operations, such as the quality, adequacy and effectiveness of the Companys
data security, privacy, technology and information security policies,
procedures, and internal controls; cybersecurity and cyber incident
response; and business continuity and disaster recovery planning and
capabilities. The Risk Committee met three times during 2016. In addition, the
Companys General Counsel, the Chief Information Officer, and the head of the
Companys compliance and internal audit functions have regularly scheduled
individual private meetings with the Risk Committee.
The Audit
Committee has certain statutory, regulatory, and other responsibilities with
respect to oversight of risk assessment and risk management. Specifically, the
Audit Committee is
responsible for overseeing
policies with respect to financial risk assessment, including guidelines to
govern the process by which major financial and accounting risk assessment and
management is undertaken by the Company. The Risk Committee coordinates with the
Audit Committee as necessary and appropriate to enable the Audit Committee to
perform its responsibilities.
The boards other independent
committees oversee risks associated with their respective areas of
responsibility. For example, the Compensation Committee considers the risks to
our business associated with our compensation policies and practices, with
respect to both executive compensation and compensation generally. The Nominating and Corporate Governance Committee considers risks related to governance matters, including succession planning for the CEO and other senior officers. In addition,
our full board regularly engages in discussions of the most significant risks
that the Company has identified and how these risks are being managed. The board
reviews periodic assessments from the Companys ongoing enterprise risk
management process that are designed to
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identify potential events that may
affect the achievement of the Companys objectives or have a material adverse
effect on the Company. The board also receives
reports on risk management from senior officers of the Company and from the
committee chairs regularly.
The Companys General Counsel reports
directly to our Chief Executive Officer, providing him with visibility into the
Companys risk profile. The head of the Companys compliance and internal audit
functions regularly reports to the Audit Committee, and
each of the General Counsel, Chief Financial Officer and the compliance
and internal audit department manager have regularly scheduled private sessions
with the Audit Committee. The Board of Directors believes that the work
undertaken by the committees of the board, together with the work of the full
board and the Companys senior management, enables the Board of Directors to
effectively oversee the Companys management of risk.
Strategic Planning
Our board has deep experience and
expertise in the area of strategy development and has significant oversight of
our corporate strategy and long-range operating plans. Acting as a full board
and through each independent board committee, the board is fully engaged in the
Companys strategic planning process.
Setting the strategic course of the
Company involves a high level of constructive engagement between management and
the board. Management develops and prioritizes strategic plans on an annual
basis. Management then reviews these strategic plans with the board during an
annual board strategy meeting, along with the Companys challenges, industry
dynamics, and legal, regulatory and governance developments, among other
factors.
Management provides the board with
comprehensive updates throughout the year regarding the implementation and
results of the Companys strategic plans, as well as monthly updates
regarding the Companys financial performance. In
addition, the CEO communicates regularly with the board on important business
opportunities, financial and operational performance, and other Company
developments such as labor relations, customer interactions and media
coverage.
This process allows the board to
understand and impact the Companys strategic plans, including plans related to
return of capital to shareowners, mergers and acquisitions, competitive
challenges, changing marketplace conditions and operational technologies. As a
result, the board has substantial oversight of the development and
implementation of the Companys strategic plans and the board is able to
effectively monitor the Companys progress with respect to the strategic goals
and objectives.
Management Succession Planning and Development
Succession planning and talent
development are important at all levels within our organization. The board
oversees managements succession plan for key positions at the senior officer
level, and most importantly for the Chief Executive Officer position. The
boards succession planning activities are ongoing and strategic. The board also
regularly evaluates succession plans in the context of the Companys overall
business strategy and with a focus on risk management.
Potential leaders interact with board
members through formal presentations and during informal events. More broadly,
the board is regularly updated on key talent indicators for the overall
workforce, including diversity, recruiting and development programs. During
2016, the board had the opportunity to meet with key members of the Companys
international leadership team from around the world. This international talent
review was the result of input from board members.
Meeting Attendance
Our Board of Directors held 6 meetings
during 2016. Our directors are diligent with respect to meeting attendance. In
the rare instances when a director cannot attend a meeting in person, they
participate by teleconference. None of our directors attended less than 75% of
the total number of board and any
committee
meetings of which he or she was a member. Our directors are expected to attend
the Annual Meeting. All directors who were serving on the board at the time of
our 2016 Annual Meeting attended the Annual Meeting.
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Code of Business Conduct
We are committed to conducting our
business in accordance with the highest ethical principles. Our Code of Business
Conduct is applicable to anyone who represents our enterprise, including our
directors, executive officers and all other employees and agents
of our Company and our subsidiary companies. A copy of our
Code of Business Conduct is available on the governance section of our investor
relations website at www.investors.ups.com.
Conflicts of Interest and Related
Person Transactions
Our Audit Committee is responsible for
overseeing our Code of Business Conduct, which includes policies regarding
conflicts of interest. The Code requires employees and directors to avoid
conflicts of interest, defined as situations where the persons private
interests conflict, or may appear to conflict, with the interests of
UPS.
The board adopted a written related person
transactions policy that applies to any transaction or series of transactions in
which: (1) the Company or any of its subsidiaries is a participant; (2) any
related person (executive officer, director, greater than 5% beneficial owner
of the Companys common stock, or an immediate family member of any of the
foregoing) has or will have a material direct or indirect interest; and (3) the
aggregate amount involved since the beginning of the Companys last completed
fiscal year will exceed or may reasonably be expected to exceed
$100,000.
The policy provides that related person
transactions that may arise during the year are subject to Audit Committee
approval or ratification. In determining whether to approve or ratify a
transaction, the Audit Committee will consider, among other factors it deems
appropriate, whether the transaction is on terms no less favorable than terms
generally available to an unaffiliated third-party, the extent of the related
persons interest in the transaction, whether the transaction would impair
independence
and whether there is a business
reason for UPS to enter into the transaction. A copy of the policy is available
on the governance section of our investor relations website at www.investors.
ups.com. The Company did not engage in any related person transactions during
2016 that required disclosure in this proxy statement or under the Companys
policy.
At least annually, each director and
executive officer completes a detailed questionnaire that discloses any business
relationships that may give rise to a conflict of interest, including
transactions where UPS is involved and where an executive officer, a director or
a related person has a direct or indirect material interest. We also review the
Companys financial systems and related person transactions to identify
potential conflicts of interest. The Nominating and Corporate Governance
Committee reviews the information from the questionnaire and our financial
systems and makes recommendations to the Board of Directors regarding the
independence of each board member. We have immaterial normal course of business
relationships with companies with which our directors are associated. The
Nominating and Corporate Governance Committee reviewed these transactions and
relationships that occurred in 2016 and believes they were entered into on terms
that are both reasonable and competitive and did not affect director
independence. Additional transactions and relationships of this nature may be
expected to take place in the ordinary course of business in the
future.
Transactions in Company
Stock
We prohibit our executive officers and
directors from hedging their ownership in UPS stock. Specifically, they are
prohibited from purchasing or selling derivative securities relating to UPS
stock and from purchasing financial instruments that are designed to hedge or
offset any decrease in the market value of UPS securities. In addition, in 2014
we adopted a policy prohibiting our executive officers and directors from
entering into future pledges of UPS stock.
Furthermore, our employees, officers,
and directors are prohibited from engaging in short sales of UPS stock. A short
sale is one involving securities that the seller does not own at the time of
sale or, if the securities are owned, where they will be delivered on a delayed
basis. Selling securities short is consistent with an expectation that the
price of the securities will decline in the near future, is often speculative in
nature, and may have an adverse effect on the market price of the securities
being sold.
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Shareowner Engagement
Shareowner
engagement is an essential aspect of corporate governance. We are receptive to
shareowner engagement, and we are committed to transparency and proactive
interactions with our investors.
Our management
team participates in numerous investor meetings to discuss our business, our
strategy and our financial results each year. These meetings include in-person,
telephone and webcast conferences, and headquarters and facility visits within
the United States and in key international locations.
During the
most recent proxy season, our management team contacted holders of over 37% of
our class B common stock to discuss our executive compensation programs and
corporate governance practices. We
proactively correspond
with key investors
throughout the year.
We have taken
into account the views of our shareowners when making many of our governance and
disclosure decisions in recent years, including:
●
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Appointment of a lead independent
director;
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Prohibition of hedging and future
pledging by executive officers and directors;
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Expanded disclosure about the
boards role in strategic planning;
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Enhanced disclosure and
governance regarding political contributions;
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Expanded disclosure regarding
sustainability;
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Added an individual payout cap to
our annual incentive plan;
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Enhanced executive compensation
disclosure, including how the metrics in our Long-Term Incentive
Performance Plan align with long-term value creation for our
shareowners;
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●
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Enhanced disclosure about board
refreshment and board succession planning, as well as our board
self-evaluation process;
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Enhanced disclosure about
diversity;
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●
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Expanded the Audit Committees
report in the proxy statement; and
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Updated the presentation of our
proxy statement to enhance readability and understanding by our
shareowners.
|
We inform our
board through our Compensation Committee and our Nominating and Corporate
Governance Committee about our conversations with key investors concerning our
executive compensation and governance practices. Our directors carefully
consider feedback from institutional investors and other shareowners. The
Compensation Committee also annually engages an independent compensation
consultant to review executive compensation trends that may be important to our
investors. The Compensation Committees consideration of shareowner feedback,
along with the market information and analysis provided by its independent
compensation consultant, have influenced a number of changes to our executive
compensation program over the past several years:
●
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Increased the performance-based
equity in our compensation program;
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Eliminated single-trigger equity
vesting following a change in control;
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Added relative total shareowner
return as a metric for our Long-Term Incentive Performance Plan;
and
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Eliminated tax
gross-ups.
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The design of
our executive compensation program is guided by our executive compensation
philosophy and core principles described in the Compensation Discussion and
Analysis on page 30. Materials from our investor presentations, including
information on the work of our board and its committees, are available on our
investor relations website at www.investors.ups.com.
Communicating with our Board of Directors
Any
shareowners or interested parties who wish to communicate directly with our
board, with our non-management directors as a group or with the lead independent
director may do so by writing to the Corporate Secretary, 55 Glenlake Parkway,
N.E., Atlanta, Georgia 30328. Please specify to whom your letter should be
directed. After review by the Corporate Secretary,
appropriate communications will be promptly forwarded to the addressee.
Advertisements, solicitations for business, requests for employment, requests
for contributions, matters that may be better addressed by management or other
inappropriate materials will not be forwarded to our directors.
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Political Contributions and Lobbying
Our responsible
participation in the U.S. political process is important to the success of our
business and the protection of shareowner value. We participate in this process
in accordance with good corporate governance practices. Our Political
Contributions and Lobbying Policy (policy) is
available at www.investors.ups.com. The following discussion highlights our
practices and procedures regarding political contributions and
lobbying.
Board Oversight and
Processes
|
Political
contributions are made in a legal, ethical and transparent manner that we
believe best represents the interests of our shareowners. All political and
lobbying activities are conducted only with the prior approval of our Public
Affairs department and in accordance with the terms of our policy. Senior
management works with Public Affairs to focus our involvement at all levels of
government on furthering our business objectives and our goal of protecting and
enhancing shareowner value. The president of our Public Affairs department
reviews all UPS political and lobbying activities and regularly reports to the
Board of Directors and to our Nominating and Corporate Governance
Committee.
●
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Our policy is overseen by the
Nominating and Corporate Governance Committee, a committee composed
entirely of independent directors.
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●
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As a general policy, UPS does not
make corporate political contributions.
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●
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Any deviations from the
prohibition against corporate political contributions must be approved by
the Nominating and Corporate Governance Committee and reported in UPSs
semi-annual political contribution report.
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●
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UPS offers certain eligible
employees the opportunity to make political contributions through a
company-sponsored political action committee, called the UPS Political
Action Committee, or UPSPAC. The UPSPAC is organized and operated on a
strictly voluntary, nonpartisan basis and is registered with the Federal
Election Commission.
|
Lobbying and Trade
Associations
|
UPS Public
Affairs is responsible for coordinating our lobbying activities, including
engagements with federal, state, and local governments. UPS is a member of a
variety of trade associations and other tax exempt organizations that engage in
lobbying. The Company may participate in lobbying activities when involvement is
consistent with specific UPS business objectives. These decisions are subject to
board oversight and are regularly reviewed by the Nominating and Corporate
Governance Committee.
●
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In accordance with the terms of
our policy, all lobbying activities are conducted only with the prior
approval of UPS Public Affairs, which works with senior management to
focus on furthering our business objectives and our goal of protecting and
enhancing shareowner value.
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The Nominating and Corporate
Governance Committee regularly reviews UPSs participation in trade
associations and other tax exempt organizations that engage in lobbying to
determine if our involvement is consistent with specific UPS business
objectives.
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We have
comprehensive policies, practices and tracking mechanisms to support and govern
our lobbying activities. These mechanisms cover compliance with laws and
regulations regarding the lobbying of government officials, the duty to track
and report lobbying activities, and the obligation to treat lobbying costs and
expenses as nondeductible for tax purposes. All lobbying contacts with covered
government officials must be coordinated with and approved by the president of
our Public Affairs department.
We are
committed to meaningful transparency and oversight with respect to our political
activities. We publish a semi-annual report disclosing the following
information, all of which is reviewed and approved by the Companys Nominating
and Corporate Governance Committee prior to publication:
●
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Amounts and recipients of any
federal and state political contributions made by UPS in the United States
(if any such expenditures are made); and
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Payments to trade associations
that receive $50,000 or more from UPS and that use a portion of the
payment for political contributions, as reported by the trade association
to UPS.
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UPS also files
a publicly available federal Lobbying Disclosure Act Report each quarter,
providing information on activities associated with influencing legislation
through communications with any member or employee of a legislative body or with
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any covered executive branch official.
The report also provides disclosure on expenditures for the quarter, describes
the specific pieces of legislation that were the topic of communications, and
identifies the individuals who lobbied on behalf of UPS.
These reports
are available at lobbyingdisclosure.house.gov and
www.senate.gov/legislative/opr.htm. UPS files similar periodic reports with
state agencies reflecting state lobbying activities which are also publicly
available.
Sustainability
We are one of
the worlds largest private employers. We serve millions of customers around the
world, we operate in more than 220 countries and territories, and many investors include our shares in their portfolios. Our success is dependent on
economic stability, global trade and a society that welcomes opportunity. We
understand the importance of acting responsibly as a business, an employer and a
corporate citizen.
Engagement on
sustainability issues is important to our stakeholders. Our board delegates
authority for day-to-day management of economic, environmental, and social
topics to UPS management. The board oversees economic, environmental and social
issues and is in touch with stakeholder concerns through a number of processes.
For example, the board is regularly briefed on issues of concern for customers,
unions, employees, retirees and investors. Furthermore, the board oversees all
efforts by UPS management to develop our values, strategies and policies related
to economic, environmental, and social impacts.
UPS was among
the first Fortune 100 companies to appoint a chief sustainability officer. Our
chief sustainability officer regularly reports to the board regarding
sustainability strategies, priorities, goals, and performance. In addition,
members of the board review the contents of our sustainability report each year
and provide feedback to the Company.
Economic,
environmental and social risks are part of our comprehensive enterprise risk
management program. The board reviews the effectiveness of our risk management
and due
diligence processes related to economic,
environmental, and social topics. In addition, the board actively considers
economic, environmental and social issues in connection with the boards
involvement in UPSs strategic planning process.
As a global
transportation and logistics company, UPS recognizes that greenhouse gas (GHG)
emissions affect the climate and pose a serious challenge to the environmentand
ultimately to the global economy. We believe that everyone should share
responsibility for improving energy efficiency and reducing GHG emissions in the
atmosphere. After engagement with several external stakeholder groups, UPS is
examining ways to enhance our climate change strategy by adopting science-based
greenhouse gas reduction targets and quantitative targets for obtaining and
producing electricity from renewable sources. We recognize the important role
that renewable energy must play in executing our carbon reduction strategy and
have assessed and will continue to assess development of various avenues to
increase UPSs use of renewable energy.
Each year we
publish a corporate sustainability report showcasing the aspirations,
achievements and challenges of our commitment to balancing the social, economic
and environmental aspects of our business. The report is available at
www.sustainability.ups.com.
Corporate Governance Guidelines and Committee Charters
Our Corporate
Governance Guidelines are available on the governance section of our investor
relations website at www.investors.ups.com. The charters for each of the Audit,
Compensation, Nominating and Corporate Governance and Risk Committees also are
available on the governance section of our investor relations website. Each
committee reviews its charter annually to determine if any changes are needed.
In
addition, the Nominating and Corporate
Governance Committee reviews the Corporate Governance Guidelines on an annual
basis and recommends any changes to the board for approval. When making changes
to the committee charters or Corporate Governance Guidelines, we consider
current governance trends and best practices, advice from outside sources and
input from our investors.
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Proposal 1 Director
Elections
What am I voting
on?
Shareowners are asked to elect each
of the 12 director nominees named in this Proxy Statement to hold office
until the 2018 Annual Meeting and until their respective successors are
elected and qualified.
Voting Recommendation:
The Board
of Directors recommends that shareowners vote
FOR
the election of each
nominee.
Vote
Required:
A director will be elected if
the number of shares voted FOR that director exceeds the number of votes
AGAINST that director.
|
The board has
nominated the 12 persons named below for election as directors at the Annual
Meeting. The nominees shall serve until the next Annual Meeting and until their
respective successors are elected and qualified. Each nominee is currently
serving on the board and, other than Franck Moison, was elected by shareowners
at our last Annual Meeting. Franck was recommended for election to the board by
our lead independent director, William Johnson. If any nominee is unable to
serve as a director, the board may reduce the number of directors that serve on
the board or choose a substitute nominee. Any nominee for whom more votes are
cast against than are cast for must offer to resign from the board.
Biographical
information about the 12 nominees for director appears below, including
information about the experience, qualifications, attributes and skills
considered by our Nominating and Corporate Governance Committee and board in
determining that the nominee should serve as a director. For additional
information about how we identify and evaluate nominees for director, see
Corporate Governance Selecting Director Nominees on page 12.
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David
P. Abney
UPS Chairman and Chief
Executive
Officer
|
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Career
David
became UPSs Chief Executive Officer in September 2014, and assumed the
role of Chairman of the Board of Directors in February 2016. David
previously served as Chief Operating Officer since 2007, overseeing
logistics, sustainability, engineering and all facets of the UPS
transportation network. Before serving as COO, David was President of UPS
International, leading the Companys strategic initiative to increase its
global logistics capabilities. During his career, he was also involved in
a number of global acquisitions that included the Fritz Companies,
Stolica, Lynx Express, and Sino-Trans in China. Earlier in his career, he
served as President of SonicAir, a same-day delivery service that signaled
UPSs move into the service parts logistics sector. David began his UPS
career in 1974 in Greenwood, Mississippi.
In
addition to his corporate responsibilities, David serves as a Trustee of
The UPS Foundation, a Trustee of the Annie E. Casey Foundation and
Chairman of the World Affairs Council of Atlanta. He is also a member
of
the Board of Directors of Johnson Controls, and the Business
Roundtable.
Reasons for
election to the UPS Board
David
has a thorough understanding of our strategies and operations gained
through his over 40 years of service to our company, a complex, global
business enterprise with a large, labor-intensive workforce. He has
significant experience in operations, having served as our Chief Operating
Officer for seven years, including in-depth knowledge of logistics. He
also has significant international experience, having spent a number of
years overseeing our international group. In addition, David has
experience serving as a director of Johnson Controls, a global diversified
technology and industrial company serving customers in more than 150
countries.
|
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Age:
61
Director since
2014
Skills and Experience
-
Leadership
-
Management of large, complex businesses
-
Logistics expertise
Other Public Company Boards
-
Johnson Controls,
Inc.
Board Committee
-
Executive (Chair)
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Rodney
C. Adkins
Former Senior Vice
President,
International
Business Machines
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Career
Rod is
President of 3RAM Group LLC, a private company specializing in capital
investments, business consulting and property management services. Rod
previously served as IBMs Senior Vice President of Corporate Strategy
before retiring in 2014. Rod was previously Senior Vice President, Systems
and Technology Group, a position he held since 2009, and Senior Vice
President of STG development and manufacturing, a position he held since
2007. In his over 30-year career with IBM, Rod held a number of other
development and management roles, including general management positions
for the PC Company, UNIX Systems and Pervasive Computing.
In
addition, Rod currently serves on the Board of Directors of Avnet, Inc.,
W.W. Grainger, Inc. and PPL Corporation.
Reasons for
election to the UPS Board
As a
senior executive of a public technology company, Rod gained a broad range
of experience, including experience in emerging technologies and services,
global business operations, and supply chain management. He is a
recognized leader in technology and technology strategy. In addition, Rod
has experience serving as a director of other publicly traded
companies.
|
|
|
|
Age:
58
Director since
2013
Skills and Experience
-
Technology and technology strategy
-
Global business operations
-
Supply chain
management
Other Public Company Boards
-
W.W. Grainger, Inc.
-
PPL Corporation
-
Avnet, Inc.
Former Public Company Boards
-
Pitney Bowes, Inc. (until 2013)
Board Committees
-
Risk (Chair)
-
Compensation
|
|
|
|
|
|
|
|
|
|
Michael
J. Burns
Former Chairman, Chief
Executive Officer
and
President, Dana Corporation
|
|
Career
Michael
was the Chairman, Chief Executive Officer and President of Dana
Corporation from 2004 until his retirement in 2008. He joined Dana
Corporation in 2004 after 34 years with General Motors Corporation.
Michael had served as President of General Motors Europe since
1998.
Reasons for
election to the UPS Board
Michael
has years of senior leadership experience gained while managing large,
complex businesses and leading an international organization that operated
in a highly competitive industry. He also has experience in design,
engineering, manufacturing, and sales and distribution. Michael also
brings deep knowledge of technology and the supply of components and
services to major vehicle manufacturers.
|
|
|
|
Age:
65
Director since
2005
Skills and Experience
-
Leadership
-
Management of large, complex businesses
-
Design, engineering, manufacturing, sales and
distribution
-
Technology
Board Committee
-
Audit
|
22
|
|
Notice of Annual Meeting of Shareowners and 2017 Proxy Statement
|
Table of
Contents
|
|
|
William
R. Johnson
UPS Lead
Director
Former Chairman, President
and Chief Executive Officer
of
H.J. Heinz Company
|
|
Career
Bill served as Chairman,
President and Chief Executive Officer of the H.J. Heinz Company, a global
packaged foods manufacturer, from 2000 until his retirement in 2013. He
became President and Chief Operating Officer of Heinz in 1996, and assumed
the position of President and Chief Executive Officer in 1998. Bill also
serves on the Board of Directors of Emerson Electric Company and PepsiCo,
Inc.
Reasons
for election to the UPS Board
Bill has significant experience
gained through over 13 years of service as the Chairman and Chief
Executive Officer of H.J. Heinz, a corporation with significant
international operations and a large, labor intensive workforce. He also
has deep experience in operations, marketing, brand development and
logistics.
|
|
|
|
Age:
68
Director since
2009
-
Lead Director since February 2016
Skills and Experience
-
Leadership
-
Management of large, complex businesses
-
Operations experience
-
Marketing and brand development
-
Logistics
Other Public Company Boards
-
Emerson Electric Company
-
PepsiCo, Inc.
Former Public Company Boards
- Education Management Corporation (until
2014)
- H.J. Heinz Company (until
2013)
Board Committees
- Nominating and Corporate
Governance (Chair)
- Executive
|
|
|
|
|
|
|
|
|
|
Candace
Kendle
Co-founder and Former
Chairman and Chief
Executive Officer of
Kendle
International Inc.
|
|
Career
Candace is the co-founder and
was, until 2011, Chairman and Chief Executive Officer of Kendle
International Inc., a global clinical research organization. Prior to
founding Kendle International, she earned a doctorate in pharmacy from the
University of Cincinnati and has held senior faculty positions at the
University of North Carolina Schools of Pharmacy and Medicine; the
University of Pennsylvania School of Medicine; the Philadelphia College of
Pharmacy and Science; and the University of Cincinnati College of
Pharmacy. Candace serves on the Board of Directors of Emerson Electric
Company.
Reasons
for election to the UPS Board
During her tenure as Chairman and
Chief Executive Officer of Kendle International, Candace gained insight
and experience in executing strategic acquisitions, expansions into new
markets, and product development. She also brings deep knowledge of the
pharmaceutical industry as a result of her doctorate and post-doctorate
work, her many years of experience as a professor and her many years of
experience in the practical application of her clinical and pharmaceutical
knowledge.
|
|
|
|
Age:
70
Director since
2011
Skills and Experience
-
Executing strategic
acquisitions
-
Expansions into new
markets
-
Pharmaceutical industry expertise
Other Public Company
Boards
-
Emerson Electric
Company
Former Public Company Boards
- H.J. Heinz Company (until
2013)
Board Committees
-
Audit
-
Risk
|
www.upsannualmeeting.com
|
|
23
|
Table of
Contents
|
|
|
Ann M.
Livermore
Former
Executive Vice President,
Hewlett Packard Company
|
|
Career
Ann serves as a director of the
Hewlett Packard Enterprise Company, after retiring as an executive of
Hewlett Packard in 2011. In her last operational role at HP, Ann was
Executive Vice President of the HP Enterprise Business. Ann joined HP in
1982 and held a variety of management positions in marketing, sales,
research and development, and business management before being elected a
corporate vice president in 1995. Ann also serves on the board of Qualcomm
Incorporated.
Reasons
for election to the UPS Board
Ann has extensive experience in
senior leadership positions at HP, one of the worlds largest information
technology companies. This experience includes leading a complex global
business organization with a large workforce. Through her 29 years at HP,
she has gained knowledge and experience in the areas of technology,
marketing, sales, research and development and business
management.
|
|
|
|
Age:
58
Director since
1997
Skills and Experience
-
Management of large, complex businesses
-
Technology strategy
-
Sales and
marketing
Other Public Company Boards
-
Hewlett Packard Enterprise
Company
-
Qualcomm Incorporated
Former Public Company Boards
-
Hewlett Packard Company (2011-2015)
Board Committees
-
Compensation (Chair)
-
Risk
-
Executive
|
|
|
|
|
|
|
|
|
|
Rudy H.P.
Markham
Former
Financial Director,
Unilever
|
|
Career
Rudy was the Financial Director
of Unilever from 2000 through his retirement in 2007. He joined Unilever
in 1968. From 1989 through 1998 he was based in East Asia where he held a
series of increasing responsibilities, ultimately serving as Business
Group President North East Asia based in Singapore. Rudy joined the board
of Unilever as Strategy and Technology Director, became a member of its
Executive Committee in 1998 and was subsequently appointed as Financial
Director. In 2007, he retired from the board of Unilever and as Chief
Financial Officer. Rudy is a director of AstraZeneca PLC and Legal and
General PLC. He also is Vice Chairman of the supervisory board of Corbion,
N.V., formerly CSM, N.V. Rudy is a British citizen and he currently
resides in the U.K.
Reasons
for election to the UPS Board
Rudy has significant experience
in finance, technology and international operations that he gained through
his almost 40 years of service at Unilever, one of the worlds largest
consumer goods companies. Rudy also has insight into the operations of an
organization with a large, global workforce, and has a unique insight into
operations based in Asia. Rudys experience also includes service as a
director of other Europe-based global public companies.
|
|
|
|
Age:
71
Director since
2007
Skills and Experience
-
Finance, technology and international operations experience
-
Management of large, complex businesses
-
Business operations in Asia
Other Public Company Boards
-
AstraZeneca PLC
-
Legal and General PLC
-
Corbion,
N.V.
Former Public Company
Boards
-
Standard Chartered Bank
(until 2014)
Board
Committee
-
Audit
|
24
|
|
Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
|
Table of
Contents
|
|
|
Franck J.
Moison
Vice
Chairman,
Colgate-Palmolive
Company
|
|
Career
Franck is
Vice Chairman for the Colgate-Palmolive Company, a position he has held
since April 2016. He is currently leading Colgate-Palmolives operations
in Asia, South Pacific and Latin America, and he also leads Global
Business Development. Previously, he was Chief Operating Officer of
Emerging Markets from 2010 until 2016, and he was given additional
responsibility for Business Development in 2013. Beginning in 1978, Franck
served in various management positions with the Colgate-Palmolive Company,
including President, Global Marketing, Global Supply Chain & R&D
from 2007 to 2010, and President, Western Europe, Central Europe and South
Pacific from 2005 to 2007.
He serves on the Board of
Directors of Hanes Brands, Inc., is a director of the French American
Chamber of Commerce, is Chairman of the International Advisory Board of
the EDHEC Business School (Paris, London, Singapore) and is a member of
the International Board of the McDonough School of Business at Georgetown
University.
Reasons
for election to the UPS Board
Franck has extensive experience
as a senior executive at a large organization engaged in international
business. He is a leader in consumer product innovation, strategic
marketing, acquisitions, and emerging market business development. He is
one of the most accomplished marketing and operating executives in the
global consumer products industry. In addition, Franck has experience
serving as a director of other publicly traded companies.
|
|
|
|
Age:
63
Director since
2017
Skills and Experience
-
Executing strategic
acquisitions
-
Emerging
markets
-
International business expertise
Other
Public Company Boards
-
Hanes Brands,
Inc.
Former Public
Company Boards
-
H.J. Heinz Corporation (until
2013)
Board Committee
-
Nominating and Corporate
Governance
|
|
|
|
|
|
|
|
|
|
Clark Sandy T. Randt,
Jr.
Former U.S.
Ambassador to the
Peoples Republic of China
|
|
Career
Sandy is a former U.S. ambassador
to the Peoples Republic of China, where he served from 2001 until 2009.
From 1994 through 2002, he was a partner resident in the Hong Kong office
of Shearman & Sterling, a major international law firm, where he
headed the firms China practice. From 1982 through 1984, Sandy served as
First Secretary and Commercial Attaché at the U.S. Embassy in Beijing. In
1974, he was the China representative of the National Council for United
States-China Trade, and from 1968 to 1972, he served in the U.S. Air Force
Security Service. Currently, Sandy is President of Randt & Co. LLC, a
company that advises firms with interests in China. Sandy also serves on
the boards of Wynn Resorts, Ltd., Valmont Industries, Inc. and Qualcomm
Incorporated.
Reasons
for election to the UPS Board
Sandy has substantial experience
in Asia and in facilitating business throughout Asia. He is recognized as
one of Americas foremost authorities on China, and has more than 35 years
of direct experience in Asia. He brings to the board experience in
diplomacy and international trade. He has experience as an advisor on
international matters to large, multinational corporations, and brings the
experience of leading the China practice of a major international law
firm.
|
|
|
|
Age:
71
Director since
2010
Skills and Experience
-
Experience facilitating business
throughout Asia
-
Diplomacy and
international trade
-
Experience as an advisor on international
matters
Other Public Company
Boards
-
Valmont Industries,
Inc.
-
Qualcomm Incorporated
-
Wynn Resorts,
Ltd.
Board
Committees
-
Nominating and Corporate Governance
-
Compensation
|
www.upsannualmeeting.com
|
|
25
|
Table of
Contents
|
|
|
John T.
Stankey
CEO,
AT&T Entertainment Group
|
|
Career
John has served as CEO, AT&T
Entertainment Group, since 2015. He is responsible for leading strategy,
marketing and operations around the development and distribution of a
premier, mobile, entertainment experience for customers through multiple
channels anywhere. John previously served as Group President and Chief
Strategy Officer of AT&T from 2012 through 2015 where he had
responsibility for AT&Ts strategy and corporate development
functions. John also served as President and CEO of AT&T Business
Solutions, where he was responsible for serving AT&Ts business
customers worldwide. John has held a number of other roles at AT&T,
including President and Chief Executive Officer of AT&T Operations,
Chief Technology Officer and Chief Information Officer. He is a member of
the Board of Advisors at the Anderson Graduate School of Management at
UCLA.
Reasons
for election to the UPS Board
During his more than 30 year
career at AT&T, John has gained significant experience in technology
and communications services, strategic planning and execution, and global
business operations. As a senior leader at one of the worlds largest
communications companies, John has extensive experience managing a large,
complex, multi-national business with a large, labor intensive workforce,
much of which is unionized. He also has experience working with a company
that has both direct to consumer and business to business
offerings.
|
|
|
|
Age:
54
Director since
2014
Skills and Experience
-
Technology and communications services
-
Global business
operations
-
Experience with large, multi-national unionized workforce
Board Committees
-
Nominating and Corporate Governance
-
Risk
|
|
|
|
|
|
|
|
|
|
Carol B.
Tomé
Chief Financial
Officer and
Executive Vice President
Corporate Services,
The
Home Depot, Inc.
|
|
Career
Carol has been Executive Vice
President and Chief Financial Officer of The Home Depot, Inc., one of the
worlds largest retailers, since 2001. In 2007 Carol assumed the
additional role of Executive Vice President Corporate Services. She
provides leadership in the areas of real estate, financial services and
strategic business development. Her corporate finance duties include
financial reporting and operations, financial planning and analysis,
internal audit, investor relations, treasury and tax. She had been Senior
Vice President Finance and Accounting/ Treasurer from 2000 until 2001,
and from 1995 until 2000, she served as Vice President and
Treasurer.
Reasons
for election to the UPS Board
Carol has extensive experience in
corporate finance gained throughout her career at The Home Depot. She
brings the experience of currently serving as Chief Financial Officer of a
complex, multi-national business with a large, labor intensive workforce.
Carol also has experience with strategic business development, including
e-commerce strategy. Carols past role as Chair of the Board of the
Federal Reserve Bank of Atlanta also brings valuable financial
experience.
|
|
|
|
Age:
60
Director since
2003
Skills and Experience
-
Financial expertise
-
Strategic Business
Development / E-Commerce
-
Management of
large, complex businesses
Board Committee
-
Audit
(Chair)
|
26
|
|
Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
|
Table of
Contents
|
|
|
Kevin M.
Warsh
Former
Member of the
Board of Governors of the
Federal Reserve
System,
Distinguished Visiting Fellow,
Hoover Institution,
Stanford
University
|
|
Career
Kevin was a member of the Board
of Governors of the Federal Reserve from 2006 until 2011. He currently
serves as the Shepard Family Distinguished Visiting Fellow in Economics at
Stanford Universitys Hoover Institution and a lecturer at its Graduate
School of Business. In addition, Kevin provides strategic advice to a
range of businesses and serves on the Presidents Strategic and Policy
Forum. From 2002 until 2006, Kevin served at the White House as President
George W. Bushs special assistant for economic policy and as executive
secretary of the National Economic Council. Kevin was previously employed
by Morgan Stanley & Co. in New York, becoming vice president and
executive director of the companys Mergers and Acquisitions
Department.
Reasons
for election to the UPS Board
Kevin has extensive experience in
understanding and analyzing the economic environment, the financial
marketplace and monetary policy. He has a deep understanding of the global
economic and business environment. Kevin also brings the experience of
working in the private sector for a leading investment bank gained during
his tenure at Morgan Stanley & Co.
|
|
|
|
Age:
46
Director since
2012
Skills and Experience
-
Economic and business environment, domestically and
internationally
-
Private sector experience
Board Committees
-
Compensation
-
Nominating and Corporate
Governance
|
www.upsannualmeeting.com
|
|
27
|
Table of
Contents
Committees of the Board of Directors
Our Board of Directors has four
committees composed entirely of independent directors: the Audit Committee, the
Compensation Committee, the Nominating and Corporate Governance Committee and
the Risk Committee. Information about each of these committees is provided
below. The board also has an Executive Committee that may exercise all powers of
the Board of Directors in the management of our business and affairs, except for
those powers expressly reserved to the board under Delaware law or otherwise
limited by the Board of Directors. David Abney is the chair of the Executive
Committee. Independent directors Ann Livermore and William Johnson also serve on
the Executive Committee. The Executive Committee held two meetings during 2016
to discuss acquisition strategy. Each member of our boards committees, other
than the Executive Committee, meets the NYSE director independence
requirements.
Audit
Committee
(1)
|
|
Compensation
Committee
(2)
|
|
Nominating and
Corporate
Governance Committee
|
|
Risk Committee
|
Carol Tomé,
Chair
|
|
Ann Livermore, Chair
|
|
William Johnson,
Chair
|
|
Rodney Adkins,
Chair
|
Michael
Burns
|
|
Rodney
Adkins
|
|
Franck Moison
|
|
Candace
Kendle
|
Candace
Kendle
|
|
Clark Randt,
Jr.
|
|
Clark Randt,
Jr.
|
|
Ann
Livermore
|
Rudy
Markham
|
|
Kevin
Warsh
|
|
John
Stankey
|
|
John
Stankey
|
|
|
|
|
Kevin
Warsh
|
|
|
|
Meetings in
2016
:
9
|
|
Meetings in
2016
:
8
|
|
Meetings in
2016:
4
|
|
Meetings in
2016:
3
|
|
Primary
Responsibilities
|
|
Primary
Responsibilities
|
|
Primary
Responsibilities
|
|
Primary
Responsibilities
|
●
Assisting the board in
discharging its responsibility relating to our accounting, reporting and
financial practices
●
Overseeing our accounting
and financial reporting processes
●
Overseeing the integrity of
our financial statements, our systems of disclosure controls and internal
controls and our compliance with legal and regulatory
requirements
●
Overseeing the performance
of our internal audit function
●
Overseeing the engagement
and performance of our independent
accountants
●
Discussing with management
policies with respect to financial risk assessment
|
|
●
Assisting the board in discharging
its responsibilities with respect to compensation of our executive
officers
●
Reviewing and approving the
corporate goals and objectives relevant to the compensation of our Chief
Executive Officer
●
Evaluating the Chief Executive
Officers performance and establishing compensation based on this
evaluation
●
Reviewing and approving the
compensation of other executive officers
●
Overseeing the evaluation of risk
associated with the Companys total compensation strategy and compensation
programs
●
Overseeing any outside consultants
retained to advise the Committee
●
Recommending to the board the
compensation to be paid to non-management directors
|
|
●
Considering recommendations from the
Chief Executive Officer and others regarding succession
planning
●
Assisting the board in identifying
and screening qualified director candidates, including
shareowner submitted nominees
●
Recommending candidates for election
or reelection to the board or to fill vacancies on the
board
●
Aiding in attracting qualified
candidates to serve on the board
●
Recommending corporate governance
principles, including the structure, composition and functioning of the
board and all board committees, the delegation of authority to
subcommittees, board oversight of management actions and reporting duties
of management
|
|
●
Overseeing managements
identification and evaluation of enterprise
risks
●
Overseeing and reviewing with
management the Companys risk governance
framework
●
Overseeing the Companys risk
identification, risk tolerance, risk assessment and management practices
for strategic enterprise risks facing the
Company
●
Reviewing approaches to risk
assessment
and mitigation strategies in coordination
with the board and other board committees
●
Communicating with the Audit
Committee as necessary and appropriate to enable the Audit Committee to
perform its statutory, regulatory, and other responsibilities with respect
to oversight of risk assessment and risk
management
|
(1)
|
All members of the Audit
Committee have been designated by the Board of Directors as audit
committee financial experts. Each member of our Audit Committee meets the
independence requirements of the NYSE and Securities and Exchange
Commission (SEC) rules and regulations applicable to Audit Committee members, and each is financially
literate.
|
(2)
|
Each member of our Compensation
Committee meets the NYSEs independence requirements applicable to
compensation committee members. In addition, each member is a non-employee
director as required by Rule 16b-3 under the Securities Exchange Act of
1934 and is an outside director under Section 162(m) of the Internal
Revenue Code. None of the members of the Compensation Committee is or was
during 2016 an employee or former employee of UPS, and none had any direct
or indirect material interest in or relationship with UPS outside of his
or her position as a non-employee director.
|
|
Compensation Committee
Interlocks and Insider Participation:
None of
our executive officers serves or served during 2016 as a member of a board
of directors or compensation committee of any entity that has one or more
executive officers who serve on our Board of Directors or Compensation
Committee.
|
|
28
|
|
Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
|
Table of
Contents
Director Compensation
We provide both cash and equity awards
to our non-employee directors. Our employee directors do not receive any
compensation for service as a director. Directors are reimbursed for their
expenses related to board membership.
The Compensation Committee of the Board
of Directors conducts a review of director compensation generally every other
year. The Compensation Committees independent compensation consultant, Frederic
W. Cook & Co., Inc. (Cook), provides advice on the competitiveness of the
companys non-employee director compensation program and recommends changes to
ensure compensation remains market competitive. In 2016, the Compensation
Committee recommended, and the Board of Directors approved, an increase in the
amount of the annual cash retainer for our non-employee directors from $100,000
to $105,000. The chairs of the Compensation, Nominating and Corporate Governance
and Risk Committees received an additional annual cash retainer of $20,000, and
the chair of the Audit Committee received an additional
annual cash retainer of $25,000. Our lead independent director received an
additional annual cash retainer of $25,000. Cash retainers are paid on a
quarterly basis. Non-employee directors may defer retainer fees by participating
in the UPS Deferred Compensation Plan, but we do not make any company or
matching contributions under this plan. There are no preferential or
above-market earnings in the UPS Deferred Compensation Plan.
Non-employee directors also receive an
annual restricted stock unit (RSU) grant. In 2016, the Compensation Committee
recommended, and the Board of Directors approved, an
increase in the dollar value of the
annual RSU award from $160,000 to $170,000. RSUs are fully vested on the date of
grant and held by the director until he or she separates from the UPS Board of
Directors, at which time the RSUs are paid out in shares of class A common
stock. This holding period increases the strength of the alignment with shareowners. The annual equity grant is prorated based on the portion of the year that
a director serves on the board.
2016 Director
Compensation
|
The following tables set forth the cash
compensation paid to our non-employee directors in 2016 and the aggregate number
of stock awards granted to our non-employee directors in 2016 as well as outstanding equity awards held as
of December 31, 2016.
2016 Director
Compensation
|
Name
|
Fees
Earned or
Paid
in
Cash($)
|
|
Stock
Awards($)
(1)
|
|
Total($)
|
Rodney C. Adkins
|
122,500
|
|
169,961
|
|
292,461
|
Michael J. Burns
|
102,500
|
|
169,961
|
|
272,461
|
D.
Scott Davis
(2)
|
150,000
|
|
0
|
|
150,000
|
William R. Johnson
(3)
|
141,250
|
|
169,961
|
|
311,211
|
Candace Kendle
|
102,500
|
|
169,961
|
|
272,461
|
Ann
M. Livermore
|
122,500
|
|
169,961
|
|
292,461
|
Rudy H.P. Markham
|
102,500
|
|
169,961
|
|
272,461
|
Franck J. Moison
(4)
|
0
|
|
0
|
|
0
|
Clark T. Randt, Jr.
|
102,500
|
|
169,961
|
|
272,461
|
John T. Stankey
|
102,500
|
|
169,961
|
|
272,461
|
Carol B. Tomé
|
127,500
|
|
169,961
|
|
297,461
|
Kevin M. Warsh
|
102,500
|
|
169,961
|
|
272,461
|
Outstanding Director
Stock Awards
(as of December 31, 2016)
|
|
Stock Awards
|
Name
|
Restricted
Stock
Units
(#)
|
|
Phantom
Stock
Units
(#)
|
Rodney C. Adkins
|
7,174
|
|
0
|
Michael J. Burns
|
17,075
|
|
0
|
D.
Scott Davis
(2)
|
0
|
|
0
|
William R. Johnson
|
18,035
|
|
0
|
Candace Kendle
|
11,449
|
|
0
|
Ann
M. Livermore
|
17,075
|
|
2,356
|
Rudy H.P. Markham
|
17,075
|
|
0
|
Franck J. Moison
(4)
|
0
|
|
0
|
Clark T. Randt, Jr.
|
13,548
|
|
0
|
John T. Stankey
|
4,743
|
|
0
|
Carol B. Tomé
|
17,075
|
|
1,114
|
Kevin M. Warsh
|
8,922
|
|
0
|
(1)
|
The values for stock awards in
this column represent the grant date fair value of the restricted stock
units granted in 2016, computed in accordance with FASB ASC Topic 718.
Information about the assumptions used to value these awards can be found
in Note 11 Stock-Based Compensation in our 2016 Annual Report on Form
10-K. Restricted stock units are fully vested on the date of grant, and
will be paid in shares of class A common stock following the directors
separation from service from UPS. Dividends earned on each award are
reinvested in additional units at each dividend payable date and are
subject to the same payment schedule as the original award.
|
|
(2)
|
Scott Davis did not stand for
re-election during the 2016 Annual Meeting and retired from the board in
May 2016. The amounts shown reflect his director compenation during
2016.
|
|
(3)
|
In February 2016, William Johnson
began serving as lead director. In addition to our typical non-employee
director compensation, the amounts shown in the table reflect compensation
for his committee chair service and lead director service during
2016.
|
|
(4)
|
Franck Moison joined the Board of
Directors in February 2017.
|
www.upsannualmeeting.com
|
|
29
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Table of Contents
Compensation Committee Report
The Compensation Committee is
responsible for reviewing and approving compensation for the executive officers,
establishing the performance goals on which the compensation plans and programs
are based and setting the overall compensation principles that guide the
Compensation Committees decision-making. The Compensation Committees
over-arching objective is to maintain an executive compensation program that
supports the long-term interests of our shareowners (including our many employee
shareowners). We seek to satisfy this objective, and to align the interests of
our executives with those of our shareowners, through a program in which a
significant portion of executive compensation is based upon
performance.
The Compensation Committee has reviewed
the Compensation Discussion and Analysis and discussed it with management. Based
on that review, the Compensation Committee recommended
to the Board of Directors that the Compensation Discussion and Analysis
be included in the 2017 proxy statement and incorporated by reference in the
Annual Report on Form 10-K for the year ended December 31, 2016 filed with the
Securities and Exchange Commission.
The following Compensation Discussion
and Analysis describes the Compensation Committees decisions regarding our
executives compensation for 2016.
The Compensation
Committee
Ann M. Livermore, Chair
Rodney C.
Adkins
Clark T. Randt, Jr.
Kevin M.
Warsh
2016
Compensation Discussion and Analysis
UPSs executive compensation programs
for 2016, and certain aspects of the 2017 programs, are described below. This
section explains how and why the Committee made its 2016 compensation decisions
for the following Named Executive Officers (NEOs):
Named Executive
Officers
|
Titles
|
David P. Abney
|
Chief Executive Officer
|
Richard N. Peretz
|
Chief Financial Officer
|
James J. Barber, Jr.
|
President, UPS International
|
Alan Gershenhorn
|
Chief Commercial Officer
|
Myron A. Gray
|
President, U.S.
Operations
|
Executive Compensation
Strategy
|
UPSs executive compensation programs
are designed to:
●
|
Drive organizational performance
by tying a significant portion of pay to company
performance;
|
●
|
Retain and motivate talent by
fairly compensating executive officers; and
|
●
|
Encourage long-term stock
ownership and careers with UPS, aligning the interests of our executives
to long-term value creation for our
company.
|
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and 2017 Proxy Statement
|
Table of Contents
A majority of total compensation (base salary, annual incentives
and long-term incentives) that can be earned by the Named Executive Officers is “at risk” and only earned by meeting
annual or long-term performance goals. The 2016 compensation elements with “at risk” components for the CEO and for
the NEOs as a group are displayed in the charts below.
|
|
|
|
|
|
2016 Target Compensation for CEO
|
|
2016 Target
Compensation for all other NEOs
|
|
|
|
|
|
|
|
Roles and Responsibilities
|
The UPS executive compensation program
is administered by the Compensation Committee of the Board of Directors. The
Compensation Committee has sole authority to engage (and terminate) outside
advisors and consultants to assist in carrying out its responsibilities. In
2016, the Committee retained Cook to act as the Compensation Committees
independent compensation advisor. Cook reports directly to the Chair of the
Compensation Committee and provides no additional services to UPS.
In November 2016, the Compensation
Committee requested and received information regarding Cooks independence and
the existence of any potential conflicts of interest, including the following
factors: (1) other services provided to UPS by the consultant (if any); (2) fees
paid by UPS as a percentage of the consulting firms total revenue; (3) policies
or procedures
maintained by the consulting firm
that are designed to prevent a conflict of interest; (4) any business or
personal relationships between the individual consultants involved in the
engagement and a member of the Compensation Committee; (5) any company stock
owned by the individual consultants involved in the engagement; and (6) any
business or personal relationships between UPS executive officers and the
consulting firm or the individual consultants involved in the engagement. The
Compensation Committee discussed these considerations and concluded that Cook is
independent and that the engagement of Cook did not raise any conflict of
interest.
The following table summarizes the
roles of the key participants in the executive compensation decision-making
process.
Participant and Roles
|
Compensation
Committee
|
●
|
Reviews and recommends the
corporate goals and objectives relevant to the Chief Executive Officers
compensation
|
●
|
Evaluates the Chief Executive
Officers performance in light of the goals and objectives; determines and
approves the Chief Executive Officers total compensation
|
●
|
Reviews the Chief Executive
Officers performance assessment of other executive officers; reviews and
approves compensation for the executive officers, including the Named
Executive Officers
|
●
|
Reviews and approves awards to
executive officers under certain incentive compensation and equity-based
plans; reviews and approves the design of other benefit plans for
executive officers
|
●
|
Oversees the evaluation of risk
associated with the Companys total compensation strategy and compensation
programs
|
●
|
Considers whether the
compensation consultant is independent and whether the work of the
compensation consultant raises any conflict of interest
|
●
|
Reviews and discusses with
management the Compensation Discussion and Analysis
|
●
|
Approves the Compensation
Committees report on executive
compensation
|
www.upsannualmeeting.com
|
|
31
|
Table of Contents
Participant and Roles
|
Independent Members of the
Board of Directors
|
●
|
Reviews the Compensation
Committees assessment of the Chief Executive Officers
performance
|
Independent Compensation Consultant
|
●
|
Serves as a resource for market
data on pay practices and trends
|
●
|
Provides independent advice to
the Compensation Committee
|
●
|
Provides competitive analysis and
advice related to outside director compensation
|
●
|
Reviews the Compensation
Discussion and Analysis
|
●
|
Conducts an annual risk review of
the Companys compensation programs
|
Executive Officers
|
●
|
The Chief Executive Officer makes
compensation recommendations to the Compensation Committee for the other
executive officers with respect to base salary and individual performance
adjustments to the annual incentive
|
●
|
The Chief Executive Officer and
the Chief Financial Officer make recommendations on performance goals
under our incentive compensation plans and provide recommendations as to
whether performance goals were achieved
|
●
|
Executive officers are not
present when the Compensation Committee meets in executive session, or
when decisions about their own compensation are
made
|
Market Data Utilization and Peer Group
Companies
|
The Compensation Committee considers
market data in making compensation decisions, however, compensation is not
targeted at a particular percentile. Market data is just one of a variety of
factors considered by the Compensation Committee when determining base salary,
annual and long-term equity awards, and total compensation levels.
General compensation survey data
provides the Compensation Committee with information about UPS compensation
levels relative to comparable sized companies. In addition,
the Compensation Committee evaluates pay practices and
compensation levels for a peer group of companies. These companies typically
have global operations, a diversified business, and annual sales and market
capitalizations comparable to UPS. The peer group considered by the Compensation
Committee in determining 2016 compensation, which is unchanged from the peer
group used for 2015 compensation, consisted of the following
companies:
The Boeing
Company
|
The Home Depot, Inc.
|
PepsiCo, Inc.
|
Caterpillar Inc.
|
Johnson &
Johnson
|
The Procter & Gamble Company
|
The Coca-Cola Company
|
The Kroger Co.
|
Sysco Corporation
|
Costco Wholesale Corporation
|
Lockheed Martin
Corporation
|
Target Corp.
|
FedEx Corporation
|
Lowes Companies,
Inc.
|
United Technologies Corporation
|
|
McDonalds Corp.
|
Walgreen Boots Alliance,
Inc.
|
Internal Compensation
Comparisons
|
The Compensation Committee considers
the differentials between executive officer compensation and the compensation
paid for other UPS positions. The Compensation Committee also considers the
additional responsibilities of the Chief Executive
Officer compared to other executive officers. In addition, internal
comparisons are made to ensure that compensation paid to executive officers is
reasonable compared to their direct reports.
Annual Performance
Reviews
|
Each year, the Chief Executive Officer
assesses the Named Executive Officers and provides feedback to the Compensation
Committee. In addition, the Compensation Committee evaluates the Chief Executive
Officers performance on an annual basis. The Compensation Committee chair
discusses the results of the evaluation with the full board in executive
session. During the
evaluation, the board
considers the Chief Executive Officers strategic vision and leadership,
execution of UPSs business strategy and achievement of business goals. Other
factors include the Chief Executive Officers ability to make long-term
decisions that create competitive advantage, and overall effectiveness as a
leader and role model.
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and 2017 Proxy Statement
|
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|
Central Elements of
UPS
Executive Compensation
|
|
|
|
|
|
Other Elements of
Compensation
|
|
|
Benefits
|
|
Perquisites
|
|
Retirement
Programs
|
|
|
✓
Includes medical, dental, and disability
plans.
✓
Mitigates the financial impact of illness, disability or
death.
✓
NEOs generally participate in the same plans as other
employees.
✓
See further details on page 39.
|
|
✓
Includes financial planning and executive health
services.
✓
Facilitates NEOs ability to carry out responsibilities,
maximize working time and minimize distractions.
✓
Benefits from providing perquisites outweighs
cost.
✓
See further details on page 39.
|
|
✓
Includes pension, retirement savings and deferred
compensation plans.
✓
NEOs and most non-union U.S. employees participate in
the same plans with same formulas.
✓
See further details on page 46.
|
|
Base salary is intended to provide our
NEOs with a fixed level of cash compensation. The Compensation Committee
considers a number of factors in determining the annual base salaries of the
Named Executive Officers. Base salaries are typically set in March and become
effective in April. In March 2016, the Compensation Committee approved a 4.0%
base salary increase for David Abney, the CEO, and an average 4.1% increase to
the other NEOs base salaries. While company performance is the most important
factor, scope of responsibility, leadership, market data and internal
compensation comparisons are all considered. No single factor is weighted more
heavily than another. The April 2016 salary increases for Named
Executive Officers were generally aligned with the salary increase budget for
other salaried employees.
In addition, in September 2016,
following its review of relevant market data and consideration of advice from
Cook, as well as its consideration of the factors described above, the
Compensation Committee approved additional 10% base salary increases for certain
NEOs, effective October 1, 2016. These increases were provided in order to
improve the competitiveness of UPS executive compensation
.
MIP Performance
Incentive Award Overview
The MIP Performance Incentive award is
designed to align pay with annual company performance. Based on the formula
approved by the Compensation Committee for 2016, the maximum executive officer
MIP awards are based on a pool of
0.5% of
adjusted net income in total. The CEOs maximum is 20% of the pool, and each
other NEOs maximum is 7.25% of the pool. The same performance measure and
maximum allocations were approved by the Compensation Committee for 2017. In
addition, the maximum MIP award for any individual is capped at $5 million,
regardless of the size of the pool.
www.upsannualmeeting.com
|
|
33
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Table of Contents
The maximum incentive pool approach is
intended to align pay with actual company performance. The awards are granted
under the 2015 Incentive Compensation Plan (the 2015 Plan) and are determined
based on the Compensation Committees discretion. The Committee may approve
awards that are less than the maximum but may not exceed the funded maximum
amount for each NEO.
The Compensation Committee considered
the following primary factors in exercising its negative discretion:
●
|
Overall company performance,
including the 2016 MIP Evaluation Metrics listed below;
|
●
|
Business environment and economic
trends;
|
●
|
Target opportunity for each
executive;
|
●
|
Individual performance,
and
|
●
|
The MIP factor (percent of
target) applied to the non-executive MIP
participants.
|
MIP Performance Incentive awards for
executive officers are considered performance-based compensation fully at risk
based on company performance. The earned award, if any, is provided two-thirds
in restricted performance units (RPUs), which vest 20% per year over a five
year period, and one-third in cash.
The number of RPUs granted is
determined by calculating the dollar value of the portion of the MIP award
allocated to RPUs and dividing by the applicable closing price of our class B
common stock on the NYSE. Because of the five year vesting schedule, we do not
maintain additional holding period requirements. When dividends are paid on UPS
common stock, an equivalent value is credited to the participants bookkeeping
account in additional RPUs. The additional RPUs are subject to the same vesting
schedule as the original MIP RPUs.
2016 MIP
Performance Incentive Award Results
Net income for 2016 was $3.4 billion.
The Companys 2016 adjusted net income was $5.1 billion which results in a
maximum incentive pool for executive officers of $25.5 million. The maximum
award for David Abney is therefore $5.1 million, and $1.9 million for the other
Named Executive Officers.
The Compensation Committee exercised
negative discretion to reduce the maximum available for each executive officer
after consideration of the factors listed above. A specific weight is not
assigned to any of the factors considered by the Compensation Committee in
exercising its discretion. After assessing the above-described considerations,
the Compensation Committee applied the 2016 MIP factor for non-executive MIP
participants (70%) as described above, and then made further adjustments based
on individual performance as described in the following section.
Individual
Performance Adjustments
The Compensation Committee maintains
discretion to adjust awards earned under the MIP up (but not beyond the funded
maximum amount for each NEO) or down based on its assessment of each NEOs
individual performance. The Compensation Committee takes into consideration the
recommendations of our CEO with respect to the NEO, other than himself.
Following its review of individual performance during 2016, the Compensation
Committee determined that some of our NEOs individual performance during 2016
warranted adjustments of their MIP awards.
Individual accomplishments that were
considered by the Committee when determining final awards are described
below.
David Abney, Chief Executive
Officer
Under Davids leadership as CEO, UPS
ended 2016 with positive results in many areas including record earnings.
However, the challenges of forecasting and adapting the UPS business model to
the growing B2C environment grew network and operations costs at a
disproportionate rate and kept overall results below expectations. Shifting
global economic fortunes and the strengthening U.S. dollar, further constrained
results.
Richard Peretz, Chief Financial
Officer
In a challenging year, Chief Financial
Officer Richard Peretz, implemented strategies to address the headwinds of
global currency valuation changes, the dynamics of the B2C environment, and
continued economic slowness in key markets. Richards guidance to UPS business
units and investments management provided some offset to these
factors.
Jim Barber, President, UPS
International
During 2016, Jim Barbers leadership of
International and Supply Chain business units yielded both gains and
opportunities. International small package saw steady growth in volume
throughout the year. Forwarding returned to growth in tonnage,
and major Emerging Market
initiatives made great progress. For all of international, revenue was below
target and profits above target.
Alan Gershenhorn, Chief Commercial
Officer
During the past year, Alan Gershenhorn,
Chief Commercial Officer, led completion of transactions with Marken, Freightex,
and Optoro. His teams also advanced a variety of UPSs top policy priorities.
Alans leadership of Corporate Strategy advanced key innovation ideas plus
long-term strategy refinement to position UPS to meet the changing customer and
market dynamics.
Myron Gray, President, U.S.
Operations
The U.S. Small Package business, led by
Myron yielded solid growth in middle market revenues in 2016. Network
performance in the U.S., both air and ground, was challenged by issues in
volatility in product mix and managing volume particularly in the B2C space.
These issues grew costs at a faster rate than revenues and eroded
margins.
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The 2016 MIP Performance Incentive
Evaluation Metrics and actual results are shown in the following
table.
2016 MIP Evaluation
Metrics
(1)
|
Target
|
|
Actual
|
Consolidated Revenue Growth
|
6.5%
|
|
4.4%
|
Adjusted Consolidated Earnings Per
|
|
|
|
Share Growth
|
7.0%
|
|
5.9%
|
Consolidated Average Daily Package
|
|
|
|
Volume Growth
|
3.0%
|
|
4.2%
|
(1)
|
The Committee excludes the effect of unusual or
infrequently occurring items, charges for restructurings (employee
severance liabilities, asset impairment costs, and exit costs),
discontinued operations, extraordinary items and the cumulative effect of
changes in accounting treatment. Consolidated revenue growth is calculated
on a currency-constant basis.
|
The table below shows the maximum
funded MIP Performance Incentive award pools based on the adjusted net income
formula, the target MIP performance incentive award, and the actual MIP
Performance Incentive award based on the Compensation Committees discretion.
The MIP award, if earned, is provided two-thirds in RPUs and one-third in
cash.
2016 MIP Performance
Incentive
Award
|
Maximum($)
|
|
Target($)
|
|
Actual($)
|
David P. Abney
|
5,103,697
|
|
1,691,276
|
|
1,065,504
|
Richard N. Peretz
|
1,850,090
|
|
592,800
|
|
394,212
|
James J. Barber, Jr.
|
1,850,090
|
|
614,141
|
|
429,899
|
Alan Gershenhorn
|
1,850,090
|
|
719,550
|
|
503,685
|
Myron A. Gray
|
1,850,090
|
|
633,391
|
|
399,036
|
MIP Ownership
Incentive Award
We encourage employees to maintain
substantial ownership of the Companys stock through our MIP Ownership Incentive
Award. All MIP participants are eligible for an additional incentive award up to
the equivalent of one months salary by maintaining significant ownership of UPS
equity securities. The MIP ownership incentive award is paid in the same
proportion of RPUs and cash as the MIP performance incentive award. The amount
of the award is equal to the value of the participants equity ownership,
multiplied by an ownership incentive award percentage. The ownership incentive
award percentage is 1.25% for the Chief Executive Officer and 1.50% for the
other Named Executive Officers, and the maximum award that can be earned is one
months salary.
Ownership levels for the 2016 awards
were determined as of December 31, 2016 by totaling the number of UPS shares in
the participants family group accounts and the participants unvested
restricted units and deferred compensation shares. The number of UPS shares is
multiplied by the closing price of a class B share on the NYSE on December 31,
2016. All of the eligible Named Executive Officers earned the maximum MIP
ownership incentive award.
Our long-term incentive programs
provide participants with grants of equity-based incentives that are intended to
reward performance over a multi-year period. Our 2016 equity programs included
the Long-Term Incentive Performance (LTIP) award
program and the Stock Options Program. All 2016 awards were granted under
the 2015 Plan. Target amounts are set as a percent of annualized base
salary.
Program
|
|
Payment Form and
Program Type
|
|
Target Amount as percent of
Annualized base
salary*
|
|
Performance
Measures and/or
Value
Proposition
|
|
Program Objectives
|
Restricted performance units (RPUs) under
LTIP
|
|
If earned, RPUs are settled in stock based on company
performance
If earned, award vests after the end of
the third fiscal year
|
|
675% Chief Executive Officer
500% Chief Commercial
Officer
350% Chief Financial Officer, U.S. and
International
Operations Presidents
250% other executive officers
|
|
Growth in Consolidated Revenue
Operating Return on Invested Capital
Relative Total Shareowner Return
Value
increases or decreases with stock price
|
|
Supports the Companys long-term operating plan and
business strategy
Provides significant link to shareowner
interests
|
Stock options
|
|
Stock options vest 20% per year over five years and have
a ten-year term
|
|
45%
Chief Executive Officer
30% other executive officers
|
|
Value recognized only if stock price
appreciates
|
|
Provides a significant link to company stock price
performance
Enhances stock ownership and shareowner
alignment
|
*
|
In September 2016, The
Compensation Committee approved changes to the LTIP and Stock Options
Program target amounts, effective for 2017 awards, as discussed in greater
detail below.
|
www.upsannualmeeting.com
|
|
35
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Table of Contents
2016 LTIP Award
Program
The LTIP award program is designed to
strengthen the performance component of our executive compensation package,
enhance retention of key talent, and align the interests of shareowners with the
incentive compensation opportunity for executives. Approximately 500 members of
our senior management team, including the Named Executive Officers, participate
in this program.
In 2014, the Compensation Committee
revised the structure of the LTIP award program in order to improve shareowner
alignment and to further enhance the long-term focus of the award by providing
for the establishment of three-year performance goals. The performance measures
selected by the Compensation Committee for the 2016 LTIP awards were growth in
consolidated revenue, operating return on invested capital (ROIC) and relative
total shareowner return (TSR) each of which is measured independently and
applied equally in determining final payouts. A target award of RPUs is granted
to executive officers and certain other eligible managers at the beginning of
the three-year performance measurement period. The actual number of RPUs that
participants will receive is determined after the end of the three-year
performance measurement period, based on achievement of the established
performance goals.
This design combines internal business
performance measures as well as an external relative performance measure. This
combination balances efforts to motivate and reward the management team for our
operational and financial success, while ensuring rewards remain aligned with
shareowner interests and returns.
2016 LTIP Target
Award Values
In March 2016, the Compensation
Committee approved 2016 target award values for the three-year 2016 LTIP awards
at 675% of base salary for the Chief Executive Officer, 500% of base salary for
the Chief Commercial Officer, and 350% of base salary for the Chief Financial
Officer, the U.S. Operations President and the International Operations
President. The 2016 LTIP target award values for other executive officers was
250% of base salary, based on the positions held as of March 2016.
Target award values are based on
internal pay comparison considerations and market data regarding total
compensation of comparable positions at similarly sized companies. Differences
in the target award values are based on increasing levels of responsibility
among the management team.
The relative TSR portion of the awards
are earned based on our TSR relative to the 17 peer companies listed previously
as measured from January 1, 2016 through December 31, 2018, a three-year
performance period. The Committee believes that these companies are the most
appropriate comparators for measuring the success of our executives in
delivering shareowner value. The peer group companies have business operations
in the markets where we compete, have similar revenue and market capitalization,
have similar global scope and are competitors for executive talent.
●
|
Our TSR for the 3-year
performance period must be at the median relative to the peer group of
companies to receive a target payout for the TSR portion of the
award.
|
●
|
Our TSR for the 3-year
performance period must be above the 75th percentile relative to the peer
group of companies to receive the maximum payout for the TSR portion of
the award, and is capped at 200% of target.
|
●
|
If our TSR is below the 25th
percentile, no amount will be earned for this portion of the
award.
|
●
|
If our TSR over the 3-year
measurement period is negative, even if it exceeds the median of the peer
group, the maximum payout percentage for the TSR portion of LTIP awards is
capped at 100% of target.
|
The threshold, target and maximum
number of RPUs that can be earned by the Named Executive Officers under the 2016
LTIP is shown in the Grants of Plan-Based Awards table. The actual number of
RPUs that the Named Executive Officers will receive is determined following the
completion of the performance measurement period ending December 31, 2018 and is
based on achievement of the performance goals for the three-year
period. The maximum LTIP award that can be earned is 200% of
target.
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Contents
Stock Option Program
The
Compensation Committee believes that stock options provide a significant link to
company performance and motivate recipients to maximize shareowner value. The
option holder receives value only if our stock price increases. Stock options
also have retention value; the option holder will not receive value from the
options unless he or she remains employed during the vesting period (except in
the case of retirement, death or disability during the vesting
period).
Our
non-qualified stock options vest 20% per year over five years and expire ten
years from the date of grant. Unvested stock options vest automatically upon
death, disability or retirement. In light of the five-year vesting schedule, we
do not maintain additional holding period requirements. Grants do not include
dividend equivalents or any reload grant features. The number of stock options
granted to the NEOs is shown in the Grants of Plan-Based Awards
table.
One-Time Grant of LTIP Awards and Stock
Options
In September 2016, the Compensation Committee made a one-time grant
of (i) additional stock options to the Chief Executive Officer and the other
NEOs, which stock options vest 20% per year over five years, and (ii) additional
LTIP RPUs to the Chief Executive Officer, the Chief Financial Officer, the U.S.
Operations President and the International
Operations President, the terms of which are identical to the LTIP RPUs
granted in March 2016. The one-time grant was made after the Compensation
Committee consulted with Cook, and is designed to: (1) drive organizational
performance by tying a significant portion of pay to company performance; (2)
ensure the competitiveness of UPS executive compensation programs; and (3) align
the financial interests of our executives to long-term value creation for our
shareowners and company. The threshold, target and maximum number of additional
RPUs that can be earned by the NEOs under the 2016 LTIP and the number of
additional stock options granted are shown in the Grants of Plan-Based Awards
table.
Total 2016 Long-Term Equity Incentive Award
Target Values
The total
long-term incentive opportunity granted to the Named Executive Officers in 2016,
based upon a percentage of annualized base salary, is shown below. The table
does not reflect the special, one-time grant of additional stock options and
RPUs discussed above.
Named Executive
Officer
|
|
LTIP RPUs
(% salary)
|
|
Options
(% salary)
|
|
Total
(% salary)
|
David P. Abney
|
|
675
|
|
45
|
|
720
|
Richard N. Peretz
|
|
350
|
|
30
|
|
380
|
James J. Barber, Jr.
|
|
350
|
|
30
|
|
380
|
Alan Gershenhorn
|
|
500
|
|
30
|
|
530
|
Myron A. Gray
|
|
350
|
|
30
|
|
380
|
www.upsannualmeeting.com
|
|
37
|
Table of
Contents
2014 LTIP Performance Targets and Results
In March 2014,
the Compensation Committee approved LTIP target award values for the NEOs for
the three-year performance period running from 2014 through 2016. The performance targets and actual results for completed performance
period for the 2014 LTIP awards are in the tables below.
(1)
The combined Total Payout for 2014 LTIP RPU
Award based on 2014 through 2016 performance period was 72%.
The RPUs for
the 2014 LTIP are now earned, meaning the amount of the award for the 2014
2016 performance period has been determined. Units earned under the 2014 LTIP
award vested on December 31, 2016. Special vesting rules apply to terminations
by reason of death, disability or retirement, as discussed in greater detail
under Potential Payments Upon Termination or Change in Control. A
participants earned RPU account will be adjusted quarterly for dividends paid
on class A common stock. Awards that vest will be distributed in the form of
class A common stock.
Growth in Consolidated
Revenue
|
Operating Return on Invested
Capital
|
Relative Total Shareowner Return
|
(1)
|
The Committee excludes the effect
of unusual or infrequently occurring items, charges for restructurings
(employee severance liabilities, asset impairment costs, and exit costs),
discontinued operations, extraordinary items and the cumulative effect of
changes in accounting treatment. Growth in Consolidated Revenue is calculated on a currency-constant
basis.
|
38
|
|
Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
|
Table of
Contents
2017 LTIP and Stock Options Target Award Values
In September 2016, the Compensation Committee (i) established the
Chief Executive Officers LTIP target amount at 700% of base salary, and
established LTIP target amounts for the Chief Financial Officer, the Chief
Commercial Officer, the President of U.S.
Operations and the President of International Operations at 450% of base salary;
and (ii) established the Chief Executive Officers Stock Options target amount
at 90% of base salary, and established the Stock Options target amounts for all
other NEOs at 50% of base salary. These new targets became effective in
2017 and were made to drive organizational performance, promote the competitiveness of UPS executive compensation, and align the financial interests of our executives to long-term value creation for our shareowners and company.
The benefits
and perquisites offered to the Named Executive Officers are generally the same
or similar to programs offered to the entire UPS management team, with the
exception of financial planning and executive health services. Additional
information on these benefits can be found in the program descriptions
below.
The UPS 401(k) Savings Plan
The UPS 401(k)
Savings Plan is offered to all U.S.-based employees who are not subject to a
collective bargaining agreement and who are not eligible to participate in
another savings plan sponsored by UPS or one of its subsidiaries. We generally
match 50% of up to 5% of eligible pay contributed to the UPS 401(k) Savings Plan
for eligible employees hired on or before December 31, 2007, 100% of up to 3.5%
of eligible pay contributed to the plan for eligible employees hired on or after
January 1, 2008, and 50% of up to 6% of eligible pay contributed to the plan for
employees hired on or after July 1, 2016. The match is paid in shares of class A
common stock.
Qualified and Non-Qualified Pension
Plans
Named
Executive Officers participate in our qualified retirement program, the UPS
Retirement Plan. Benefits payable
under the plan are subject to the maximum compensation limits and the annual
benefit limits for a tax-qualified defined benefit plan as established by the
Internal Revenue Service. Amounts exceeding these limits are paid pursuant to
the UPS Excess Coordinating Benefit Plan, which is a non-qualified restoration
plan designed to replace the amount of benefits limited under the tax-qualified
plan. Without the Excess Coordinating Benefit Plan, the Named Executive Officers
would
receive a lower benefit as a percent of
final average earnings than the benefit received by other participants in the
UPS Retirement Plan.
Financial Planning Service
Our executive
officers are eligible for a financial services benefit. The Company reimburses
fees from financial and tax service providers up to $15,000 per year, including
the cost of personal excess liability insurance coverage.
Executive Health Services
UPSs business
continuity is best facilitated by avoiding any prolonged or unexpected absences
by members of its senior management team. All Named Executive Officers were
provided certain executive health services, including comprehensive physical
examinations.
Discounted Employee Stock Purchase
Plan
We have
maintained a Discounted Employee Stock Purchase Plan since 2001. The plan
provides all U.S.-based employees, including the Named Executive Officers, and
some internationally based employees, with the opportunity to purchase up to
$10,000 in our class A common stock annually at a discount to the market price
of our stock. The plan complies with Section 423 of the Internal Revenue Code.
Our class A common stock may be acquired under the plan at a purchase price
equal to 95% of the fair market value of the shares on the last day of each
calendar quarter. Share purchases are made on a quarterly basis.
Other Compensation and Governance
Policies
|
Stock Ownership Guidelines
The board has
adopted stock ownership guidelines that apply to management and to members of
our Board of Directors. The guidelines further our core philosophy that managers
should also be long-term owners of our company. Target ownership is eight times
annual salary for our Chief Executive Officer and five times annual salary for
other executive officers. The target for our non-employee directors is five
times their annual retainer. Shares of class A common stock, deferred units and
vested and unvested
RSUs and RPUs are considered
owned for purposes of calculating ownership. Managers and directors are expected
to reach target ownership within five years of adoption of the guideline or the
date that the manager or director became subject to the guideline.
CEOs Target
Ownership = 8x annual salary
Other Executive Officers Target Ownership = 5x annual salary
Directors Target Ownership = 5x annual retainer
|
www.upsannualmeeting.com
|
|
39
|
Table of
Contents
As of December 31, 2016, all of the
Named Executive Officers met or exceeded their stock ownership guidelines,
excluding any shares pledged. In addition, all of our non-employee directors who
have been subject to the stock ownership guidelines for at least five years
exceed their target ownership. RSUs are required to be held by the non-employee
director until he or she separates from the UPS Board of Directors.
Hedging and Pledging Policies
We prohibit
our executive officers and directors from hedging their ownership in UPS stock.
Specifically, they are prohibited from purchasing or selling derivative
securities relating to UPS stock and from purchasing financial instruments that
are designed to hedge or offset any decrease in the market value of UPS
securities. Additionally, in 2014 we adopted a policy prohibiting our directors
and executive officers from entering into future pledges of UPS securities,
including using UPS securities as collateral for a loan and holding UPS
securities in margin accounts. Executive officers are encouraged (but not
required) to unwind any existing pledges. Furthermore, our employees, officers
and directors are prohibited from engaging in short sales of UPS
stock.
Clawback Policy
The 2015 Plan
contains clawback provisions for all awards granted under the plans. If the
Compensation Committee determines that financial results used to determine the
amount of any award
are materially restated, and
that an executive officer engaged in fraud or intentional misconduct, we will
seek repayment or recovery of the award from that executive officer. This
clawback applies to all awards granted under the 2015 Plan, our 2012 Omnibus Incentive Compensation Plan ("2012 Plan") and our
2009 Incentive Compensation Plan (2009 Plan).
Employment or Change in Control Agreements
We do not have
employment agreements, separate change in control agreements or severance
agreements with any of our executive officers. The 2015 Plan requires a double
trigger both a change in control and a qualifying termination of employment to
accelerate the vesting of awards. Equity awards granted to the Named Executive
Officers prior to May 7, 2009 are subject to a single trigger, while equity
awards granted after that date are subject to the double trigger.
Equity Grant Practices
Grants for all
equity programs are approved by the Compensation Committee. Stock options have
an exercise price equal to the NYSE closing market price on the date of
grant.
Consideration of Previous Say on Pay Voting
Results
|
We hold our
say on pay vote every three years. A substantial majority (over 70%) of votes
cast for the shareowner say on frequency vote at our 2011 Annual Meeting
expressed a preference for having a say on pay vote every three years. At our
2014 Annual Meeting of shareowners, over 91% of votes cast for or against the
say on pay proposal approved our compensation program as described in our 2014
proxy statement. In making compensation decisions, the Compensation Committee
carefully
considered the results of the most
recent say on pay vote as well as many other factors as described herein and did
not make any changes to our compensation programs as a result of the most recent
say on pay vote. Our next say on pay vote will be held during this 2017 Annual
Meeting. We welcome input from our shareowners on our compensation policies and
compensation program at any time, not just in the years when we conduct a say on
pay vote.
Tax
Implications of Executive Compensation
|
Under
Section 162(m) of the Internal Revenue Code, compensation paid to certain Named
Executive Officers in excess of $1 million is not tax deductible unless it is
paid under a predetermined objective performance plan meeting certain
requirements, or satisfies one of various other exemptions. The interests of our
shareowners are best served by not restricting the Compensation Committees
discretion and flexibility in crafting compensation plans and arrangements.
The
Compensation Committee intends to structure awards to comply with Section
162(m). A number of requirements must be met for particular compensation
to
qualify,
however, there can be no assurance that any compensation awarded will be fully
deductible under all circumstances. In addition, in appropriate circumstances
the Compensation Committee may approve elements of compensation for certain
executive officers that are not fully deductible.
40
|
|
Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
|
Table of
Contents
Summary Compensation Table for 2016
The following
table shows Named Executive Officer compensation for 2016, 2015 and
2014.
Name and
Principal Position
|
|
Year
|
|
Salary
($)
(2)
|
|
Stock
Awards
($)
(3)
|
|
Option
Awards
($)
(4)
|
|
Non-Equity
Incentive
Plan
Compensation
($)
(5)
|
|
Change
in
Pension
Value
($)
(6)
|
|
All Other
Compensation
($)
(7)
|
|
Total
($)
|
David P. Abney
|
|
2016
|
|
1,082,421
|
|
9,172,450
|
|
991,275
|
|
387,741
|
|
2,052,152
|
|
38,533
|
|
13,724,572
|
Chief Executive Officer
|
|
2015
|
|
1,018,764
|
|
7,900,221
|
|
450,015
|
|
633,478
|
|
1,262,043
|
|
27,722
|
|
11,292,243
|
|
|
2014
|
|
674,546
|
|
5,356,738
|
|
150,952
|
|
467,782
|
|
1,688,265
|
|
19,074
|
|
8,357,357
|
Richard N. Peretz
(1)
|
|
2016
|
|
485,070
|
|
2,766,672
|
|
246,812
|
|
146,034
|
|
1,478,420
|
|
21,945
|
|
5,144,953
|
Chief Financial
Officer
|
|
2015
|
|
382,431
|
|
777,171
|
|
60,870
|
|
210,267
|
|
21,945
|
|
14,890
|
|
1,467,574
|
James J. Barber, Jr.
(1)
|
|
2016
|
|
500,706
|
|
2,879,564
|
|
251,731
|
|
158,384
|
|
858,785
|
|
27,394
|
|
4,676,564
|
President, UPS
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan Gershenhorn
|
|
2016
|
|
565,956
|
|
3,530,073
|
|
276,065
|
|
183,731
|
|
885,522
|
|
32,703
|
|
5,474,050
|
Chief Commercial Officer
|
|
2015
|
|
550,125
|
|
3,178,079
|
|
162,014
|
|
249,375
|
|
136,175
|
|
20,347
|
|
4,296,115
|
|
|
2014
|
|
494,338
|
|
2,267,355
|
|
137,171
|
|
202,200
|
|
1,093,279
|
|
18,694
|
|
4,213,037
|
Myron A. Gray
|
|
2016
|
|
514,509
|
|
2,979,788
|
|
256,182
|
|
148,495
|
|
809,728
|
|
40,352
|
|
4,749,054
|
President, U.S. Operations
|
|
2015
|
|
484,251
|
|
1,785,621
|
|
142,609
|
|
240,109
|
|
123,781
|
|
30,392
|
|
2,806,763
|
|
|
2014
|
|
472,149
|
|
2,290,197
|
|
138,789
|
|
173,572
|
|
963,398
|
|
29,421
|
|
4,067,526
|
(1)
|
Richard Peretz became an NEO in 2015 and James Barber became an NEO
in 2016.
|
(2)
|
This
column represents the salary earned from January 1 through December 31 of
the applicable year. Base salary increases generally are effective in
April of the relevant fiscal year. In September 2016, the
Compensation Committee approved additional base salary increases for David
Abney, Richard Peretz, James Barber and Myron Gray, which were effective
October 1, 2016.
|
(3)
|
The values for stock awards in this column
represent the aggregate grant date fair value for the stock awards granted
in the applicable year, computed in accordance with FASB ASC Topic 718.
These awards include LTIP RPUs and MIP RPUs. Awards with performance
conditions are computed based on the probable outcome of the performance
condition as of the grant date for the award. Information about the
assumptions used to value these awards can be found in Note 11
Stock-Based Compensation in our 2016 Annual Report on Form 10-K. The
amounts reported for these awards may not represent the amounts that the
individuals will actually receive. The amounts received, if any,
ultimately will depend on company performance and the change in our stock
price over time. An overview of the features of these awards can be found
in the Compensation Discussion and Analysis.
|
|
The amounts listed for the CEO increased in
2015 as a result of his participation in the LTIP award at the CEO level
of 675% of annualized salary. David Abney was named as CEO and the 2015
LTIP grant was the first that he participated in as a CEO. In addition,
the 2016 amounts listed for all NEOs include the one-time grant of
additional LTIP RPUs as previously disclosed.
|
|
In
accordance with SEC rules, we also are required to disclose the grant date
fair value for awards with performance conditions assuming maximum
performance. The grant date fair value for the 2016 LTIP RPU awards,
assuming maximum performance, are as follows: Abney $14,417,934; Peretz
$4,252,261; Barber $4,387,058; Gershenhorn $5,535,075; and Gray
$4,530,768. The grant date fair value for the 2015 LTIP RPU awards,
assuming maximum performance, are as follows: Abney $14,974,175; Peretz
$1,352,670; Barber $2,822,226; Gershenhorn $5,971,337; and Gray
$2,954,720. The grant date fair value for the 2014 LTIP RPU awards,
assuming maximum performance, are as follows: Abney $8,821,058; Peretz
$825,930; Barber $3,029,316; Gershenhorn $3,453,603; and Gray
$3,488,565.
|
(4)
|
The
values for stock option awards represent the aggregate grant date fair
value for the option awards granted in the applicable year, computed in
accordance with FASB ASC Topic 718. The assumptions used to value these
awards can be found in Note 11 Stock-Based Compensation in our 2016
Annual Report on Form 10-K. The 2016 amounts listed include the one-time
grant of additional stock options as previously disclosed. The amounts
reported for these awards may not represent the amounts that the
individuals will actually receive. The amounts received, if any,
ultimately will depend on the change in our stock price over time. An
overview of the features of these awards can be found in the Compensation
Discussion and Analysis section.
|
(5)
|
This column shows the cash
portion of the MIP Performance Incentive award and the MIP Ownership
Incentive award. For a description of the MIP, see Compensation
Discussion and Analysis. The MIP Ownership Incentive award was paid at
100% of target (one months salary) for each eligible Named Executive
Officer who met or exceeded his or her target ownership level in the same
proportion that the MIP award is paid.
|
www.upsannualmeeting.com
|
|
41
|
Table of
Contents
(6)
|
This
column represents an estimate of the annual increase in the actuarial
present value of the Named Executive Officers accrued benefit under our
retirement plans for the applicable year, assuming retirement at age 60
(or current age if greater). See Executive Compensation 2016 Pension
Benefits for additional information, including assumptions used in this
calculation. The change in pension value can be impacted by a number of
factors, including additional credited service, changes in amounts of
compensation covered by the benefit formula, plan amendments and
assumption changes.
|
(7)
|
The
following table breaks down the amounts shown in this column for
2016:
|
|
Name
|
|
401(k)
Match ($)
|
|
Life
Insurance ($)
|
|
Financial
Planning ($)
|
|
Healthcare
Benefits ($)
|
|
Other ($)*
|
|
Total
($)
|
|
David P. Abney
|
|
6,625
|
|
8,177
|
|
7,078
|
|
6,526
|
|
10,127
|
|
38,533
|
|
Richard N.
Peretz
|
|
6,625
|
|
2,245
|
|
1,708
|
|
2,218
|
|
9,149
|
|
21,945
|
|
James J. Barber,
Jr.
|
|
6,625
|
|
2,326
|
|
2,171
|
|
6,526
|
|
9,746
|
|
27,394
|
|
Alan Gershenhorn
|
|
6,625
|
|
2,662
|
|
4,671
|
|
6,526
|
|
12,219
|
|
32,703
|
|
Myron A. Gray
|
|
6,625
|
|
2,397
|
|
15,000
|
|
6,526
|
|
9,804
|
|
40,352
|
|
*
|
In August 2016, we celebrated the
40
th
Anniversary of UPSs
operations in Europe. In order to commemorate the event, our executive
officers spouses were invited to attend celebratory events connected to
the anniversary. The resulting cost of the spouses attendance, including
airfare, meals and special events, was treated as imputed income to the
Companys executive officers.
|
42
|
|
Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
|
Table of
Contents
2016 Grants of Plan-Based Awards
The following
table provides information about awards granted in 2016 to each of the Named
Executive Officers.
|
|
|
|
Estimated Possible
Payouts
Under Non-Equity Incentive
Plan Awards
(1)
|
|
Estimated Future
Payouts
Under Equity Incentive
Plan
Awards
(2)
|
|
All
Other
Stock
Awards:
Number
of Shares
of Stock
or
Units
(#)
(3)
|
|
All
Other
Option
Awards:
Number
of
Securities
Underlying
Options
(#)
(4)
|
|
Exercise
or Base
Price
of
Option
Awards
($/Sh)
|
|
Grant
Date
Fair
Value
of
Stock
and
Option
Awards
($)
(5)
|
Name
|
|
Grant
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
|
|
David P. Abney
|
|
|
|
0
|
|
563,759
|
|
1,701,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/2016
|
|
|
|
|
|
|
|
0
|
|
65,626
|
|
131,252
|
|
|
|
|
|
|
|
|
7,578,315
|
|
|
9/16/2016
|
|
|
|
|
|
|
|
0
|
|
2,714
|
|
5,428
|
|
|
|
|
|
|
|
|
327,113
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,632
|
|
$
|
98.77
|
|
461,266
|
|
|
9/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,616
|
|
$
|
106.86
|
|
530,009
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,828
|
|
|
|
|
|
|
1,267,022
|
Richard N. Peretz
|
|
|
|
0
|
|
197,600
|
|
616,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/2016
|
|
|
|
|
|
|
|
0
|
|
15,139
|
|
30,278
|
|
|
|
|
|
|
|
|
1,748,204
|
|
|
9/16/2016
|
|
|
|
|
|
|
|
0
|
|
4,960
|
|
9,920
|
|
|
|
|
|
|
|
|
597,855
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,899
|
|
$
|
98.77
|
|
136,811
|
|
|
9/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,807
|
|
$
|
106.86
|
|
110,001
|
|
|
3/4/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,370
|
|
|
|
|
|
|
420,613
|
James J. Barber, Jr.
|
|
|
|
0
|
|
204,714
|
|
616,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/2016
|
|
|
|
|
|
|
|
0
|
|
15,683
|
|
31,366
|
|
|
|
|
|
|
|
|
1,811,013
|
|
|
9/16/2016
|
|
|
|
|
|
|
|
0
|
|
5,054
|
|
10,108
|
|
|
|
|
|
|
|
|
609,172
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,183
|
|
$
|
98.77
|
|
141,730
|
|
|
9/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,807
|
|
$
|
106.86
|
|
110,001
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,651
|
|
|
|
|
|
|
459,379
|
Alan Gershenhorn
|
|
|
|
0
|
|
239,850
|
|
616,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/2016
|
|
|
|
|
|
|
|
0
|
|
26,250
|
|
52,500
|
|
|
|
|
|
|
|
|
3,031,284
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,588
|
|
$
|
98.77
|
|
166,064
|
|
|
9/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,807
|
|
$
|
106.86
|
|
110,001
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,050
|
|
|
|
|
|
|
498,789
|
Myron A. Gray
|
|
|
|
0
|
|
211,130
|
|
616,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/26/2016
|
|
|
|
|
|
|
|
0
|
|
16,175
|
|
32,350
|
|
|
|
|
|
|
|
|
1,867,828
|
|
|
9/16/2016
|
|
|
|
|
|
|
|
0
|
|
5,241
|
|
10,482
|
|
|
|
|
|
|
|
|
631,740
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,440
|
|
$
|
98.77
|
|
146,181
|
|
|
9/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,807
|
|
$
|
106.86
|
|
110,001
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,862
|
|
|
|
|
|
|
480,220
|
(1)
|
Reflects the target and maximum
values of the cash portion of the 2016 MIP performance incentive award for
each Named Executive Officer. Does not include the MIP ownership incentive
award, which is equal to one-third of one months salary: Abney $32,573;
Peretz $14,630; Barber $15,085; Gershenhorn $15,836; and Gray
$15,483. The potential payments for the MIP performance incentive award
are performance-based and therefore at risk. The MIP program is described
in the Compensation Discussion and Analysis.
|
(2)
|
These columns show the potential
number of units that would be awarded under the 2016 LTIP at the end of
the applicable three-year performance period if the threshold, target or
maximum performance goals are satisfied.
|
(3)
|
This column represents the number
of RPUs granted under the 2015 MIP on March 2, 2016. For Richard Peretz,
the 2015 MIP RPUs were granted on March 4, 2016.
|
(4)
|
This column shows the number of
stock options granted under the Stock Options Program on March 2, 2016 and
September 16, 2016.
|
(5)
|
This column shows the grant date
fair value of the LTIP RPUs, MIP RPUs, and stock options
under FASB ASC Topic 718 granted to each of the Named Executive Officers
in 2016. The grant date fair values are calculated, using the NYSE
closing price of UPS stock on the date of grant for RPUs and the
Black-Scholes option pricing model for stock options. The grant date fair
value of the units granted under the 2016 LTIP, which have performance
conditions, are computed based on the probable outcome of the performance
condition for the 2016 LTIP performance period. There can be no assurance
that the grant date fair value of stock and option awards will ever be
realized.
|
www.upsannualmeeting.com
|
|
43
|
Table of
Contents
Outstanding Equity Awards at Fiscal Year-End 2016
The following
table shows the number of shares covered by exercisable options, unexercisable
options, and unvested RPUs held by the Named Executive Officers on December 31,
2016.
|
|
Option Awards
|
|
Stock Awards
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(1)
|
|
Option
Exercise
Price
($)
|
|
Option
Grant
Date
|
|
Option
Expiration
Date
|
|
Number of
Shares
or
Units of
Stock
That
Have
Not
Vested
(#)
(2)
|
|
Market
Value
of
Shares or
Units of
Stock
That
Have
Not
Vested
($)
(3)
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have Not
Vested
(#)
(4)
|
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units
or
Other
Rights
That
Have Not
Vested
($)
(3)
|
David P. Abney
|
|
8,619
|
|
0
|
|
71.58
|
|
5/7/2008
|
|
5/7/2018
|
|
|
|
|
|
|
|
|
|
|
13,315
|
|
0
|
|
55.83
|
|
5/6/2009
|
|
5/6/2019
|
|
|
|
|
|
|
|
|
|
|
9,745
|
|
0
|
|
67.18
|
|
5/5/2010
|
|
5/5/2020
|
|
|
|
|
|
|
|
|
|
|
9,357
|
|
0
|
|
74.25
|
|
5/4/2011
|
|
5/4/2021
|
|
|
|
|
|
|
|
|
|
|
7,696
|
|
1,924
|
|
76.89
|
|
3/1/2012
|
|
3/1/2022
|
|
|
|
|
|
|
|
|
|
|
5,676
|
|
3,785
|
|
82.87
|
|
3/1/2013
|
|
3/1/2023
|
|
|
|
|
|
|
|
|
|
|
2,948
|
|
4,424
|
|
96.98
|
|
3/4/2014
|
|
3/4/2024
|
|
|
|
|
|
|
|
|
|
|
4,981
|
|
19,926
|
|
101.93
|
|
3/2/2015
|
|
3/2/2025
|
|
|
|
|
|
|
|
|
|
|
0
|
|
26,632
|
|
98.77
|
|
3/2/2016
|
|
3/2/2026
|
|
|
|
|
|
|
|
|
|
|
0
|
|
37,616
|
|
106.86
|
|
9/16/2016
|
|
9/16/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,081
|
|
2,989,938
|
|
143,354
|
|
16,434,068
|
Richard N. Peretz
|
|
673
|
|
2,696
|
|
101.93
|
|
3/2/2015
|
|
3/2/2025
|
|
|
|
|
|
|
|
|
|
|
0
|
|
7,899
|
|
98.77
|
|
3/2/2016
|
|
3/2/2026
|
|
|
|
|
|
|
|
|
|
|
0
|
|
7,807
|
|
106.86
|
|
9/16/2016
|
|
9/16/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,674
|
|
879,761
|
|
27,102
|
|
3,106,969
|
James J. Barber, Jr.
|
|
1,883
|
|
0
|
|
70.90
|
|
5/9/2007
|
|
5/8/2017
|
|
|
|
|
|
|
|
|
|
|
2,971
|
|
743
|
|
76.89
|
|
3/1/2012
|
|
3/1/2022
|
|
|
|
|
|
|
|
|
|
|
4,881
|
|
3,254
|
|
82.87
|
|
3/1/2013
|
|
3/1/2023
|
|
|
|
|
|
|
|
|
|
|
2,535
|
|
3,804
|
|
96.98
|
|
3/4/2014
|
|
3/4/2024
|
|
|
|
|
|
|
|
|
|
|
1,508
|
|
6,035
|
|
101.93
|
|
3/2/2015
|
|
3/2/2025
|
|
|
|
|
|
|
|
|
|
|
0
|
|
8,183
|
|
98.77
|
|
3/2/2016
|
|
3/2/2026
|
|
|
|
|
|
|
|
|
|
|
0
|
|
7,807
|
|
106.86
|
|
9/16/2016
|
|
9/16/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,466
|
|
1,199,810
|
|
33,494
|
|
3,839,707
|
Alan Gershenhorn
|
|
8,165
|
|
0
|
|
67.18
|
|
5/5/2010
|
|
5/5/2020
|
|
|
|
|
|
|
|
|
|
|
8,220
|
|
0
|
|
74.25
|
|
5/4/2011
|
|
5/4/2021
|
|
|
|
|
|
|
|
|
|
|
6,760
|
|
1,691
|
|
76.89
|
|
3/1/2012
|
|
3/1/2022
|
|
|
|
|
|
|
|
|
|
|
5,060
|
|
3,374
|
|
82.87
|
|
3/1/2013
|
|
3/1/2023
|
|
|
|
|
|
|
|
|
|
|
2,679
|
|
4,020
|
|
96.98
|
|
3/4/2014
|
|
3/4/2024
|
|
|
|
|
|
|
|
|
|
|
1,793
|
|
7,174
|
|
101.93
|
|
3/2/2015
|
|
3/2/2025
|
|
|
|
|
|
|
|
|
|
|
0
|
|
9,588
|
|
98.77
|
|
3/2/2016
|
|
3/2/2026
|
|
|
|
|
|
|
|
|
|
|
0
|
|
7,807
|
|
106.86
|
|
9/16/2016
|
|
9/16/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,147
|
|
1,507,124
|
|
56,247
|
|
6,448,200
|
44
|
|
Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
|
Table of
Contents
|
|
Option Awards
|
|
Stock Awards
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(1)
|
|
Option
Exercise
Price
($)
|
|
Option
Grant
Date
|
|
Option
Expiration
Date
|
|
Number of
Shares
or
Units of
Stock
That
Have
Not
Vested
(#)
(2)
|
|
Market
Value of
Shares
or
Units of
Stock
That
Have
Not
Vested
($)
(3)
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have Not
Vested
(#)
(4)
|
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units
or
Other
Rights
That
Have Not
Vested
($)
(3)
|
Myron A. Gray
|
|
8,033
|
|
0
|
|
67.18
|
|
5/5/2010
|
|
5/5/2020
|
|
|
|
|
|
|
|
|
|
|
8,238
|
|
0
|
|
74.25
|
|
5/4/2011
|
|
5/4/2021
|
|
|
|
|
|
|
|
|
|
|
6,776
|
|
1,694
|
|
76.89
|
|
3/1/2012
|
|
3/1/2022
|
|
|
|
|
|
|
|
|
|
|
5,119
|
|
3,414
|
|
82.87
|
|
3/1/2013
|
|
3/1/2023
|
|
|
|
|
|
|
|
|
|
|
2,711
|
|
4,067
|
|
96.98
|
|
3/4/2014
|
|
3/4/2024
|
|
|
|
|
|
|
|
|
|
|
1,578
|
|
6,315
|
|
101.93
|
|
3/2/2015
|
|
3/2/2025
|
|
|
|
|
|
|
|
|
|
|
0
|
|
8,440
|
|
98.77
|
|
3/2/2016
|
|
3/2/2026
|
|
|
|
|
|
|
|
|
|
|
0
|
|
7,807
|
|
106.86
|
|
9/16/2016
|
|
9/16/2026
|
|
12,511
|
|
1,434,241
|
|
34,760
|
|
3,984,854
|
(1)
|
Stock
options vest over a five-year period with 20% of the option vesting at
each anniversary date of the grant. All options expire ten years from the
date of grant. Under the terms of our 2009 Plan, 2012 Plan and 2015 Plan,
unvested stock options become fully vested on the date of retirement for
the NEOs if they meet certain service requirements.
|
(2)
|
Unvested stock awards in this column include RPUs granted as part of MIP in 2012, 2013, 2014, 2015 and 2016 that vest over a
five-year period with approximately 20% of the award vesting on January 15
of each year. Values are rounded to the closest unit.
|
(3)
|
Market value based on NYSE closing price on December 30, 2016 of
$114.64.
|
(4)
|
Represents the potential units to
be earned under the 2015 LTIP award (for the three year performance period
ending 12/31/2017), the 2016 LTIP award (for the three year performance
period ending 12/31/2018), and any dividend equivalent units allocated since the grants were
made. For all performance periods, we have assumed target performance
goals will be met.
|
Option Exercises and Stock Vested in 2016
The following
table sets forth the number and corresponding value realized during 2016 with
respect to options that were exercised, and restricted stock units and
restricted performance units that vested, for each Named Executive
Officer.
|
|
Option Awards
|
|
Stock Awards
|
Name
|
|
Number of
Shares
Acquired
on Exercise
(#)
|
|
Value Realized
on Exercise
($)
(1)
|
|
Number of
Shares
Acquired
on
Vesting
(#)
(2)
|
|
Value
Realized
on
Vesting
($)
(3)
|
David P. Abney
|
|
0
|
|
0
|
|
34,491
|
|
3,213,630
|
Richard N.
Peretz
|
|
0
|
|
0
|
|
4,318
|
|
402,009
|
James J. Barber,
Jr.
|
|
1,590
|
|
24,438
|
|
12,990
|
|
1,207,850
|
Alan Gershenhorn
|
|
0
|
|
0
|
|
15,511
|
|
1,447,428
|
Myron A. Gray
|
|
0
|
|
0
|
|
15,543
|
|
1,450,700
|
(1)
|
This
number is calculated by subtracting the exercise price from the price of
our class B common stock on the date of exercise and multiplying the
number of shares underlying the options. The amounts in this column may
not represent amounts that were actually realized.
|
(2)
|
The
value in this column represents approximately 20% of the 2011 LTI award
granted in the form of RPUs that vested on May 4, 2016; the 2013 LTIP
award granted in the form of RPUs that vested on January 31, 2016; and
approximately 20% of the MIP RPUs granted in 2012, 2013, 2014 and 2015 that vested on January 15, 2016. Vested RPU
awards are distributed to participants in an equivalent number of shares
of class A common stock.
|
(3)
|
The value shown is based on the
NYSE closing prices on January 15, 2016, the date the RPUs granted under
MIP vested, of $90.04 per share; January 31, 2016, the date the RSUs
granted under the 2013 LTIP award vested, of $93.20 per share; and May 4,
2016, the date that the RPUs granted under the 2011 LTI vested, of $103.11
per share. If the vesting date is not a NYSE trading day, the prior
trading days closing price is used.
|
www.upsannualmeeting.com
|
|
45
|
Table of
Contents
2016 Pension Benefits
The following
table quantifies the pension benefits expected to be paid to each of the Named
Executive Officers from the UPS Retirement Plan and the UPS Excess Coordinating
Benefit Plan. The terms of each are described below.
Name
|
|
Plan Name
|
|
Number
of
Years
Credited
Service(#)
(1)
|
|
Present
Value
of
Accumulated
Benefit($)
(2)
|
|
Payments
During
Last
Fiscal
Year($)
|
David P. Abney
|
|
UPS Retirement Plan
|
|
42.8
|
|
2,187,253
|
|
0
|
|
|
UPS Excess Coordinating Benefit
Plan
|
|
|
|
7,439,957
|
|
0
|
|
|
Total
|
|
|
|
9,627,210
|
|
0
|
Richard N. Peretz
|
|
UPS Retirement Plan
|
|
35.6
|
|
1,518,255
|
|
0
|
|
|
UPS Excess Coordinating Benefit
Plan
|
|
|
|
1,315,141
|
|
0
|
|
|
Total
|
|
|
|
2,833,396
|
|
0
|
James J. Barber, Jr.
|
|
UPS Retirement Plan
|
|
32.4
|
|
1,476,549
|
|
0
|
|
|
UPS Excess Coordinating Benefit
Plan
|
|
|
|
2,057,783
|
|
0
|
|
|
Total
|
|
|
|
3,534,332
|
|
0
|
Alan Gershenhorn
|
|
UPS Retirement Plan
|
|
37.1
|
|
1,821,690
|
|
0
|
|
|
UPS Excess Coordinating Benefit
Plan
|
|
|
|
3,377,890
|
|
0
|
|
|
Total
|
|
|
|
5,199,580
|
|
0
|
Myron A. Gray
|
|
UPS Retirement Plan
|
|
38.0
|
|
1,910,797
|
|
0
|
|
|
UPS Excess Coordinating Benefit
Plan
|
|
|
|
3,266,716
|
|
0
|
|
|
Total
|
|
|
|
5,177,513
|
|
0
|
(1)
|
This
column represents years of service as of December 31, 2016 for all
plans.
|
|
(2)
|
This
column represents the total discounted value of the monthly lifetime
benefit earned at December 31, 2016, assuming the executive continues in
service and retires at age 60 or at the executives actual age, if later.
The present value is not the monthly or annual lifetime benefit that would
be paid to the executive. The present values are based on discount rates
of 4.37% and 4.49% for the UPS Retirement Plan, and UPS Excess
Coordinating Benefit Plan, respectively, at December 31, 2016. The present
values assume no pre-retirement mortality and utilize the RP 2014 healthy
mortality table with adjusted mortality improvement after 2007 (no collar
for the Retirement Plan and white collar for the Excess Plan), with
mortality improvements converging to 0.5% in 2022 on the RPEC
model.
|
The UPS
Retirement Plan is noncontributory and includes substantially all eligible
employees of participating domestic subsidiaries who are not members of a
collective bargaining unit, as well as certain employees covered by a collective
bargaining agreement. The UPS Retirement Plan was closed to new entrants as of
July 1, 2016.
UPS also
sponsors a non-qualified defined benefit plan, the UPS Excess Coordinating
Benefit Plan, for non-union employees whose pay and benefits in the qualified
plan are limited by the Internal Revenue Service. An employee must be at least
age 55 with 10 years of service to be eligible to participate in this plan. In
the year that an individual first becomes eligible to participate in the UPS
Excess Coordinating Benefit Plan, there is an increase for the participant for
that year equal to the full present value of the participants accrued benefit
in the plan.
The
Compensation Committee believes that the retirement, deferred compensation
and/or savings plans offered at UPS are important for the long-term economic
well-being of our employees, and are important elements of attracting and
retaining the key talent necessary to compete. The UPS Retirement Plan
and UPS Excess Coordinating Benefit Plan provide
monthly lifetime benefits to participants and their eligible beneficiaries based
on final average compensation at retirement, service with UPS and age at
retirement. Participants may choose to receive a reduced benefit payable in an
optional form of annuity that is equivalent to the single lifetime
benefit.
The plans
provide monthly benefits based on the greatest result from up to four benefit
formulas. Participants receive the largest benefit from among the applicable
benefit formulas. For Alan Gershenhorn, Richard Peretz, and James Barber, the
formula that results in the largest benefit is called the grandfathered
integrated formula. This formula provides retirement income equal to 58.33% of
final average compensation, offset by a portion of the Social Security benefit.
A participant with less than 35 years of benefit service receives a
proportionately lesser amount. For David Abney and Myron Gray, the formula that
results in the largest benefit is called the integrated account formula. This
formula provides retirement income equal to 1.2% of final average compensation
plus 0.4% of final average compensation in excess of the Social Security Wage
Base times years of benefit service.
46
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Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
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Table of
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Participants
earn benefit service for the time they work as an eligible UPS employee. For
purposes of the formulas, compensation includes salary and an eligible portion
of the MIP award. The average final compensation for each participant in the
plans is the average covered compensation of the participant during the five
highest consecutive years out of the last ten full calendar years of
service.
Benefits
payable under the UPS Retirement Plan are subject to the maximum compensation
limits and the annual benefit limits for a tax-qualified defined benefit plan as
prescribed and adjusted from time to time by the Internal Revenue Service.
Eligible amounts exceeding these limits will be paid from the UPS Excess
Coordinating Benefit Plan. Under this plan, participants receive the benefit in
the form of a life annuity.
The plans
permit participants with 25 or more years of benefit service to retire as early
as age 55 with only a limited reduction in the amount of their monthly benefits.
Each of the Named Executive Officers would be eligible to retire at age 60 and
receive unreduced benefits from the plans. In addition, the plans allow
participants with ten years or more of service to retire at age 55 with a larger
reduction in the amount of their benefit. As of December 31, 2016, James Barber,
Alan Gershenhorn,
Myron Gray and Richard Peretz were eligible for early retirement with
reduced benefits. If they had retired on December 31, 2016, their benefits would
be reduced by 10.50% (Barber), 4.50% (Gershenhorn), 2.75% (Gray), and 15.00%
(Peretz). David Abney is currently eligible for early retirement with unreduced
benefits.
2016 Non-Qualified Deferred Compensation
The following
table shows the executive contributions, earnings and account balances for the
Named Executive Officers in the UPS Deferred Compensation Plan for
2016.
Name
|
|
Executive
Contributions
in Last FY
($)
|
|
Registrant
Contributions
in Last
FY
($)
|
|
Aggregate
Earnings
in
Last FY
($)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance at
Last
FYE
($)
(1)
|
David P. Abney
|
|
0
|
|
0
|
|
441,785
|
|
0
|
|
2,724,447
|
Richard N. Peretz
|
|
0
|
|
0
|
|
154,159
|
|
0
|
|
834,514
|
James J. Barber, Jr.
|
|
35,049
|
|
0
|
|
92,244
|
|
0
|
|
544,891
|
Alan Gershenhorn
|
|
0
|
|
0
|
|
75,890
|
|
0
|
|
791,966
|
Myron A. Gray
|
|
0
|
|
0
|
|
120,873
|
|
0
|
|
661,362
|
(1)
|
Certain amounts in this column
represent salary, bonus or stock options contributed by the Named
Executive Officer to the plan in prior years as follows:
|
Abney $1,122,199; Peretz $339,973; Barber $204,956;
Gershenhorn $467,915; Gray $253,157.
|
The deferred
compensation vehicles in the UPS Deferred Compensation Plan are described below.
Not all of the Named Executive Officers participate in each feature of the UPS
Deferred Compensation Plan.
●
|
Prior to December 31, 2004,
contributions could be deferred from executive officers monthly salary
and from their half-month bonus.
|
●
|
Prior to December 31, 2004,
non-employee directors could defer retainer and meeting fees quarterly.
Assets from the discontinued UPS Retirement Plan for Outside Directors
were transferred to the 2004 and Before Salary Deferral Feature in
2003.
|
●
|
No contributions were permitted
after December 31, 2004.
|
●
|
After December 31, 2004,
executive officers may defer 1% to 35% of their monthly salary and 1% to
100% of the cash portion of the MIP award. They may also defer excess
pre-tax contributions if the UPS 401(k) Savings Plan fails the annual
average deferral percentage test.
|
●
|
Non-employee directors may defer
retainer fees quarterly.
|
●
|
Elections are made annually for
the following calendar year.
|
www.upsannualmeeting.com
|
|
47
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Table of
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Stock Option Deferral
Feature
|
●
|
Assets are invested solely in
shares of UPS stock.
|
●
|
Non-qualified or Incentive Stock
Options which vested prior to December 31, 2004 were deferrable during the
annual enrollment period for the following calendar year. Participants
deferred receipt of UPS stock that would otherwise be taxable upon the
exercise of the stock option.
|
●
|
The shares received upon exercise
of these options are deferred into a rabbi trust. The shares held in this
trust are classified as treasury stock, and the liability to participating
employees is classified as deferred compensation obligations in the
shareowners equity section of the balance sheet.
|
●
|
No deferrals of stock options
were permitted after December 31, 2004.
|
●
|
As a result of the requirements
applicable to non-qualified deferred compensation arrangements under
Section 409A of the Internal Revenue Code and related guidance, deferral
of stock options is no longer offered under the UPS Deferred Compensation
Plan for options that vested after December 31,
2004.
|
Withdrawals and Distributions under the UPS
Deferred Compensation Plan
|
●
|
For the 2004 and Before Salary
Deferral Feature, participants may elect to receive the funds in a lump
sum or up to a 10 year installment (of 120 monthly payments), subject to
restrictions if the balance is less than $20,000.
|
●
|
For the 2005 and Beyond Salary
Deferral Feature, participants may elect to receive funds in a lump sum or
up to a 10 year installment (120 monthly payments), subject to
restrictions if the balance, plus the total balance in any other account
which must be aggregated with the 2005 and Beyond Salary Deferral Account
under Section 409A of the Internal Revenue Code, is less than the Internal
Revenue Code Section 402(g) annual limit in effect for qualified 401(k)
plans on the date the participant becomes eligible for a
distribution.
|
●
|
For the Stock Option Deferral
Feature, participants may elect to receive shares in a lump sum or up to
10 annual installments, subject to restrictions if the balance is less
than $20,000. The distribution of shares will occur pro-rata based on the
type of stock options (non-qualified or Incentive) that were originally
deferred.
|
●
|
The distribution election under
the 2005 and Beyond Salary Deferral Feature may be changed one time only,
but may be changed more frequently under the 2004 and Before Salary
Deferral Feature and the Stock Option Deferral Feature.
|
●
|
Hardship distributions are
permitted under all three features of the UPS Deferred Compensation
Plan.
|
●
|
Withdrawals are not permitted
under the 2005 and Beyond Salary Deferral Feature, but withdrawals are
permitted for 100% of the account under the 2004 and Before Salary
Deferral Feature and Stock Option Deferral Feature. However, withdrawals
will result in a forfeiture of 10% of the participants total account
balances.
|
No company
contributions are made to any of the three features of the UPS Deferred
Compensation Plan. The aggregate balances shown in the table above represent
amounts that the Named Executive Officers have earned but elected to defer, plus
earnings (or less losses). There are no above-market or preferential earnings in
the UPS Deferred Compensation Plan. The investment options mirror those in the
UPS 401(k) Savings Plan. Dividends earned on shares of UPS stock in the UPS
Deferred Compensation Plan are earned at the same rate as all other class A and
class B shares of common stock. Dividends are added to the participants
deferred compensation balance. Deferral elections made under the UPS Deferred
Compensation Plan are irrevocable once made.
48
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and 2017 Proxy Statement
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Table of
Contents
Potential Payments on Termination or Change in Control
We have not
entered into any employment agreements with our NEOs that provide for severance
or change in control benefits, nor do we have separate severance or change in
control agreements or arrangements with our NEOs. Our
Compensation Committee believes that the UPS promotion from within policy has
created a culture where long tenure for executives is the norm. As a result, the
NEOs serve without employment contracts, as do most of our other U.S.-based
non-union employees.
The equity
awards granted between May 7, 2009 and May 2, 2012 were made pursuant to the
2009 Plan. Equity awards granted on or after May 3, 2012 were made pursuant to
the 2012 Plan. Equity awards granted on or after May 7, 2015 were made pursuant
to the 2015 Plan. The plans and the related award certificates contain
provisions that affect outstanding awards to all plan participants, including
the NEOs, in the event of a change in control (as defined below) of the Company
and a participants retirement, death or disability. Upon a participants
retirement, death or disability:
●
|
Options will become immediately
exercisable;
|
●
|
Restrictions imposed on shares of
restricted stock, RSUs or RPUs that are not performance-based lapse;
and
|
●
|
Target payout opportunities
attainable under all outstanding awards of performance-based restricted
stock, RSUs and RPUs are deemed to have been fully earned for the
applicable performance periods. Payment of an award (in cash or stock, as
applicable) is made to the participant based upon an assumed achievement
of all relevant targeted performance goals and the length of time within
the applicable performance period which has
elapsed.
|
In the event of
a change in control, if the successor company continues, assumes or substitutes
other grants for outstanding awards, and within two years following the change
in control the participant is terminated by the successor without cause or the
participant resigns for good reason, then:
●
|
Options will become immediately
exercisable as of the termination or resignation;
|
●
|
Restrictions imposed on
restricted stock or RSUs that are not performance-based will lapse;
and
|
●
|
Performance-based awards will
vest with respect to each performance measurement tranche completed during
the performance period prior to the termination or resignation (or, if the
performance period is not divided into separate performance measurement
tranches, proportionately based on the portion of the performance period
completed prior to such resignation or
termination).
|
In the event of
a change in control, if the successor company does not continue, assume or
substitute other grants for outstanding awards, or in the case of a dissolution
or liquidation of UPS, then options will be fully vested and exercisable and the
Compensation Committee will either give a participant a reasonable opportunity
to exercise the option before the transaction resulting in the change in
control, or pay the participant the difference between the exercise price for
the option and the consideration provided to other similarly situated
shareowners.
Other
outstanding awards will vest and be paid generally as described in the bullet
points above (except, where applicable, timing of payment generally will be tied
to such change in control, rather than termination or resignation).
Our 1999
Incentive Compensation plan provided for tax gross-ups upon a change in control
in certain situations. However, all awards made under the 1999 Plan have already
vested and are not subject to the change in control provisions. The 2015 Plan,
2012 Plan and 2009 Plan do not provide for the payment of tax
gross-ups.
www.upsannualmeeting.com
|
|
49
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Table of
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The following table shows the potential
payments to the NEOs upon a termination of employment under various
circumstances. In preparing the table, we assumed the termination occurred on
December 31, 2016. The closing price per share of our common
stock on December 30, 2016 was $114.64. In addition, as of
December 31, 2016, all currently serving NEOs were eligible for early
retirement.
Name
|
|
Accelerated
Vesting of
Equity
Awards
($)
(1)
|
|
Benefits
($)
(2)
|
|
Total
($)
|
David P. Abney
|
|
|
|
|
|
|
Termination (Voluntary or Involuntary)
|
|
0
|
|
0
|
|
0
|
Change in Control (with termination)
|
|
20,663,576
|
|
0
|
|
20,663,576
|
Early
Retirement
|
|
20,663,576
|
|
0
|
|
20,663,576
|
Normal Retirement
|
|
20,663,576
|
|
0
|
|
20,663,576
|
Death
|
|
20,663,576
|
|
0
|
|
20,663,576
|
Disability
|
|
20,663,576
|
|
0
|
|
20,663,576
|
Richard N. Peretz
|
|
|
|
|
|
|
Termination (Voluntary or Involuntary)
|
|
0
|
|
0
|
|
0
|
Change in Control (with termination)
|
|
4,207,091
|
|
0
|
|
4,207,091
|
Early
Retirement
|
|
4,207,091
|
|
217,874
|
|
4,424,965
|
Normal Retirement
|
|
4,207,091
|
|
0
|
|
4,207,091
|
Death
|
|
4,207,091
|
|
0
|
|
4,207,091
|
Disability
|
|
4,207,091
|
|
0
|
|
4,207,091
|
James J. Barber, Jr.
|
|
|
|
|
|
|
Termination (Voluntary or Involuntary)
|
|
0
|
|
0
|
|
0
|
Change in Control (with termination)
|
|
5,505,431
|
|
0
|
|
5,505,431
|
Early
Retirement
|
|
5,505,431
|
|
255,266
|
|
5,760,697
|
Normal Retirement
|
|
5,505,431
|
|
0
|
|
5,505,431
|
Death
|
|
5,505,431
|
|
0
|
|
5,505,431
|
Disability
|
|
5,505,431
|
|
0
|
|
5,505,431
|
Alan Gershenhorn
|
|
|
|
|
|
|
Termination (Voluntary or Involuntary)
|
|
0
|
|
0
|
|
0
|
Change in Control (with termination)
|
|
8,501,426
|
|
0
|
|
8,501,426
|
Early
Retirement
|
|
8,501,426
|
|
215,353
|
|
8,716,779
|
Normal Retirement
|
|
8,501,426
|
|
0
|
|
8,501,426
|
Death
|
|
8,501,426
|
|
0
|
|
8,501,426
|
Disability
|
|
8,501,426
|
|
0
|
|
8,501,426
|
Myron A. Gray
|
|
|
|
|
|
|
Termination (Voluntary or Involuntary)
|
|
0
|
|
0
|
|
0
|
Change in Control (with termination)
|
|
5,938,275
|
|
0
|
|
5,938,275
|
Early
Retirement
|
|
5,938,275
|
|
148,730
|
|
6,087,005
|
Normal Retirement
|
|
5,938,275
|
|
0
|
|
5,938,275
|
Death
|
|
5,938,275
|
|
0
|
|
5,938,275
|
Disability
|
|
5,938,275
|
|
0
|
|
5,938,275
|
(1)
|
Represents the value of
accelerated vesting of stock options and RPUs in accordance with the terms
of the the 2009 Plan, the 2012 Plan, the 2015 Plan and the applicable
award certificates. Also includes the 2015 and 2016 LTIP awards
calculated at target. The performance measurement period for the 2015 LTIP
award ends December 31, 2017 and the performance measurement period for
the 2016 LTIP award ends December 31, 2018.
|
(2)
|
Represents the actuarial present
value of the incremental non-qualified amounts payable upon change in
control, early retirement, death and disability from the UPS Excess
Coordinating Benefit Plan. For information about the UPS Excess
Coordinating Benefit Plan, see the 2016 Pension Benefits table and related
narrative. The same assumptions were used to calculate the present value
of the amounts in this table that were used for the 2016 Pension Benefits
table except that benefits are assumed to be payable immediately as of
December 31, 2016 (or age 55 if later) instead of as of age 60. Only
individuals eligible for early retirement (55 with 10 years of service)
who are not yet age 60 will have an early retirement value in the table.
|
50
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Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
|
Table of Contents
The previous table does not include
payments and benefits to the extent they are generally provided on a
non-discriminatory basis to salaried employees not subject to a collective
bargaining agreement upon termination of employment. These include:
●
|
Life insurance upon death in the
amount of 12 times the employees monthly base salary, with a December 31,
2016 maximum benefit payable of $1 million;
|
●
|
A death benefit in the
amount of three times the employees monthly salary;
|
●
|
Disability benefits;
and
|
●
|
Accrued vacation
amounts.
|
The tables also do not include amounts
to which the executives would be entitled to receive that are already described
in the compensation tables that appear earlier in this proxy statement,
including:
●
|
The value of equity awards that are already
vested;
|
●
|
Amounts payable under defined benefit pension plans;
and
|
●
|
Amounts previously deferred into the deferred compensation
plan.
|
Definition
of a Change in Control
|
A change in control is deemed to have
occurred as a result of any one of the following events:
●
|
The consummation of a
reorganization, merger, share exchange or consolidation, in each case,
where persons who were the shareowners immediately prior to such event do
not, immediately thereafter, own more than 50% of the combined voting
power of the reorganized, merged,
surviving
or consolidated companys then outstanding securities entitled to vote
generally in the election of directors; or
|
●
|
The board members as of May 7,
2009 or board members whose elections or nominations are approved by a
majority of such board members cease for any reason to constitute at least
an 80% majority of the Board of Directors.
|
Equity Compensation
Plans
The following table sets forth
information as of December 31, 2016 concerning shares of our common stock
authorized for issuance under all of our equity compensation plans.
Plan category
|
|
Number of Securities
to be
Issued Upon
Exercise of
Outstanding Options,
Warrants and
Rights
(a)
|
|
Weighted-Average
Exercise
Price of
Outstanding Options,
Warrants and
Rights
(b)
|
|
Number of
Securities
Remaining Available for
Future Issuance
Under
Equity Compensation Plans
(Excluding
Securities
Reflected in Column
(a))
(c)
|
|
Equity compensation plans approved by security
holders
(1)
|
|
17,351,925
|
|
8.47
|
|
32,929,670
|
(2)
|
Equity compensation plans not approved by security
holders
|
|
|
|
|
|
|
|
Total
|
|
17,351,925
|
|
8.47
|
|
32,929,670
|
|
(1)
|
Includes the 1999 Plan, the 2009
Plan, the 2012 Plan, the 2015 Plan and the Discounted Employee Stock Purchase Plan, each
of which has been approved by our shareowners. Effective with the
authorization of the 2015 Plan that was approved by our shareowners in May
2015, no additional securities may be issued under the 1999 Plan, the
2009 Plan or the 2012 Plan. Awards that do not entitle the holder to receive or purchase
shares and awards that are settled in cash are not counted against the
aggregate number of shares available for awards under the 2015
Plan.
|
(2)
|
In addition to grants of options,
warrants or rights, this number includes up to 17,417,463 shares of common
stock or other stock-based awards that may be issued under the 2015 Plan,
and up to 15,512,207 shares of common stock that may be issued under the
Employee Stock Purchase Plan. This number does not include shares under
the 1999 Plan, the 2009 Plan or the 2012 Plan because no new awards may be
made under those plans.
|
www.upsannualmeeting.com
|
|
51
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Table of Contents
Proposal 2
Advisory Vote to Approve Executive Compensation
What am I voting
on?
Whether you approve, on an advisory
basis, the compensation of the Named Executive Officers disclosed in this
Proxy Statement.
Voting
Recommendation:
The Board of Directors
recommends that shareowners vote
FOR
the proposal.
Vote Required:
An affirmative vote requires the majority of those
shares present in person or represented by proxy and entitled to
vote.
|
Pay that reflects performance and
alignment of pay with the long-term interests of our shareowners are key
principles that underlie our compensation program. In accordance with the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act)
and Section 14A of the Exchange Act, shareowners have the opportunity to vote,
on an advisory basis every three years, to approve the compensation of our Named
Executive Officers. This is often referred to as a say on pay vote, and
provides you, as a shareowner, with the ability to cast a vote with respect to
our 2016 executive compensation programs and policies and the compensation paid
to the Named Executive Officers as disclosed in this proxy statement through the
following resolution:
RESOLVED, that the shareowners
approve, on an advisory basis, the compensation of the Named Executive Officers,
as described in the Compensation Discussion and Analysis section and in the
compensation tables and accompanying narrative disclosure in the Companys Proxy
Statement for the 2017 Annual Meeting of Shareowners.
As discussed in the Compensation
Discussion and Analysis section, the compensation paid to our Named Executive
Officers reflects the following principles of our compensation
program:
●
|
Encourages executive
decision-making that is aligned with the long-term interests of our
shareowners;
|
●
|
Ties a significant portion of
executive pay to Company performance over a multi-year
period;
|
●
|
Promotes UPSs long-standing
culture of owner-management; and
|
●
|
Uses a balance of short- and
long-term performance metrics to encourage the efficient management of our
business and minimize excessive
risk-taking.
|
Because this vote is advisory in
nature, it will not affect any compensation. Although the vote is non-binding,
the Compensation Committee and the board value our shareowners views and will
consider the voting results. To the extent there is any significant negative
vote, we will consult directly with shareowners to better understand the
concerns that influenced the vote. The Compensation Committee and the board
would consider the constructive feedback obtained through this process in making
decisions about future compensation arrangements for our Named Executive
Officers. The Company currently has a policy of holding say on pay votes once every three years. Unless the company modifies this policy, the next say on pay vote is expected to occur at the 2020 Annual Meeting.
In accordance with the Dodd-Frank Act,
this vote does not overrule any decisions by the board, will not create or imply
any change to or any additional fiduciary duties of the board and will not
restrict or limit the ability of shareowners generally to make proposals for
inclusion in proxy materials related to executive compensation.
Proposal 3
Advisory Vote on the Frequency of Future Advisory Votes to Approve Executive
Compensation
What am I voting
on?
Whether you approve, on an advisory
basis, that future advisory votes to approve executive compensation be conducted
every year (annual), every two years (biannual), or every three years
(triennial).
Voting
Recommendation:
The Board of Directors
recommends that shareowners select that future advisory votes to approve executive
compensation occur on a
TRIENNIAL
basis.
Vote Required:
An affirmative vote requires the majority of those
shares present in person or represented by proxy and entitled to
vote.
|
52
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Notice of Annual Meeting of Shareowners and 2017 Proxy Statement
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Table of Contents
The Dodd-Frank Act and Section 14A of
the Exchange Act provide shareowners with the opportunity to indicate, on
an advisory basis at least once every six years, their preference as to the
frequency of future say on pay votes, often referred to
as a say when on pay vote. For this proposal, shareowners can indicate
whether they would prefer that we hold future advisory votes to approve executive
compensation every one (annual), two (biennial) or three (triennial)
years.
The board recommends that future
advisory votes to approve executive compensation should be held every three years, or on
a triennial basis, so that the next advisory vote would be held at our Annual
Meeting of Shareowners in 2020. We believe that our pay is aligned with
performance. We have made changes to the compensation program beginning in 2011
to further strengthen the link between pay and performance. Both our annual
incentive program, the MIP, and our long-term equity incentive program, the
LTIP, are performance based.
The Compensation Committee has designed
our executive compensation program to reward performance over a multi-year
period. The most significant component of our executive compensation program is
long-term equity incentive compensation. The LTIP rewards performance over a
three-year performance period, and the stock options and MIP RPUs vest over five years. We believe that having an advisory vote to approve
executive compensation every three years better correlates with these
longer-term compensation programs and objectives and our business planning
cycles.
In addition, we believe annual say on
pay voting increases focus on the short-term. Providing an advisory vote every
three years gives shareowners and proxy advisory firms adequate time to evaluate
the effectiveness of both short-term and long-term
compensation strategies and related business outcomes. It also provides
the Compensation Committee time to implement any necessary changes.
Finally, offering the advisory vote
every three years will improve the ability of institutional funds that hold
shares in a large number of public companies to exercise their voting rights in
a more deliberate, thoughtful and informed way. We believe that institutions
will be able to provide us with more meaningful input on our compensation
program if they are not simultaneously required to evaluate the compensation
program of every public company, every year.
Although the vote is non-binding, the
board and the Compensation Committee will review the voting results in making a
decision as to the policy to be adopted by the board on the frequency of future
advisory votes on executive compensation.
In accordance with the Dodd-Frank Act,
this vote does not overrule any decisions by the board, will not create or imply
any change to or any additional fiduciary duties of the board and will not
restrict or limit the ability of shareowners in general to make proposals for
inclusion in proxy materials related to executive compensation.
www.upsannualmeeting.com
|
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53
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Table of Contents
Ownership of Our
Securities
|
Securities
Ownership of Certain Beneficial Owners and Management
The following table sets forth
information as of December 31, 2016 as to each person known to us to be the
beneficial owner of more than five percent of our class A or class B common
stock, based on SEC filings by such persons.
Name and address
|
Number of Shares
of Class B
Stock
Beneficially Owned
|
|
Percent of
Class B
Stock
|
BlackRock Inc.
(1)
|
|
|
|
55 East 52nd Street
|
45,602,894
|
|
6.60%
|
New
York, NY 10055
|
|
|
|
The Vanguard Group
(2)
|
|
|
|
100 Vanguard Blvd.
|
46,110,349
|
|
6.68%
|
Malvern, PA 19355
|
|
|
|
(1)
|
According to a Schedule 13G/A
filed with the SEC on January 27, 2017, BlackRock Inc. has sole voting
power with respect to 39,135,436 shares of our class B common stock and
sole dispositive power with respect to 45,602,894 shares of our class B
common stock.
|
(2)
|
According to a Schedule 13G/A
filed with the SEC on February 10, 2017, The Vanguard Group has sole
voting power with respect to 1,079,031 shares of our class B common stock, shared voting power with respect to 144,182 shares of our class B common stock, sole dispositive power with respect to 44,894,455 shares of our class B
common stock and shared dispositive power with respect to 1,215,894 shares
of our class B common stock.
|
The following table sets forth the beneficial ownership of our class
A and class B common stock as of February 8, 2017 by our current
directors and nominees, our Named Executive Officers, and all of our directors and executive officers as a group. Ownership is calculated in accordance with SEC rules and regulations.
|
|
Number of
Shares
Beneficially
Owned
(1)(2)
|
|
Additional Shares
in
which the Beneficial
Owner Has or
Participates
in the Voting or
Investment
Power
(5)
|
|
|
Total
Shares
Beneficially
Owned
(6)
|
|
Directors and Executive
Officers
|
|
Class A
Shares
(3)(4)
|
|
Class B Shares
|
|
|
|
David P. Abney
|
|
332,284
|
|
1,452
|
|
3,866,520
|
(7)
|
|
4,200,256
|
|
Rodney C. Adkins
|
|
7,174
|
|
0
|
|
0
|
|
|
7,174
|
|
James J. Barber, Jr.
|
|
76,480
|
|
0
|
|
0
|
|
|
76,480
|
|
Michael J. Burns
|
|
21,923
|
|
0
|
|
0
|
|
|
21,923
|
|
Alan Gershenhorn
|
|
167,664
|
|
3,553
|
|
0
|
|
|
171,217
|
|
Myron A. Gray
|
|
166,851
|
|
0
|
|
0
|
|
|
166,851
|
|
William R. Johnson
|
|
18,035
|
|
160
|
|
0
|
|
|
18,195
|
|
Candace Kendle
|
|
11,449
|
|
0
|
|
0
|
|
|
11,449
|
|
Ann
M. Livermore
|
|
44,679
|
|
0
|
|
0
|
|
|
44,679
|
|
Rudy H.P. Markham
|
|
18,592
|
|
0
|
|
0
|
|
|
18,592
|
|
Franck J. Moison
|
|
400
|
|
0
|
|
0
|
|
|
400
|
|
Richard N. Peretz
|
|
41,838
|
|
0
|
|
0
|
|
|
41,838
|
|
Clark T. Randt, Jr.
|
|
13,548
|
|
0
|
|
0
|
|
|
13,548
|
|
John T. Stankey
|
|
4,743
|
|
0
|
|
0
|
|
|
4,743
|
|
Carol B. Tomé
|
|
22,622
|
|
2,936
|
|
0
|
|
|
25,558
|
|
Kevin M. Warsh
|
|
8,922
|
|
0
|
|
0
|
|
|
8,922
|
|
All
directors and executive officers as a group (22 persons)
|
|
1,252,518
|
|
12,949
|
|
3,866,520
|
(7)
|
|
5,131,987
|
(8)
|
(1)
|
Includes shares for which the
named person has sole voting or investment power or has shared voting or
investment power with his or her spouse. Includes shares held by immediate
family members as follows: Abney 26,500; Peretz 80; Barber 0;
Gershenhorn 482; Gray 0; and all directors and executive officers as a
group 27,062. Each named individual disclaims all beneficial ownership
of the shares held by immediate family members.
|
(2)
|
Includes shares pledged as
follows: Abney 0; Peretz 0 Barber 14,490; Gershenhorn 0; Gray
20,497; and all directors and executive officers as a group 43,635. The
aggregate number of shares pledged by directors and executive officers as
a group represents significantly less than 1% of our issued and
outstanding shares of common stock. Shares pledged by directors and
executive officers are not counted for purposes of compliance with our
stock ownership guidelines. All of the executive officers that had
existing pledges met their stock ownership guidelines after excluding the
shares subject to pledge. None of our directors have pledged any shares of
UPS stock. As described under Corporate Governance Transactions in
Company Stock, we adopted a policy in 2014 prohibiting our directors and
executive officers from entering into future pledges of their UPS
stock.
|
54
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Notice of Annual Meeting of Shareowners and 2017 Proxy Statement
|
Table of Contents
(3)
|
Includes class A shares that may
be acquired by directors upon the conversion of RSUs following separation
from the UPS Board of Directors. These RSUs are also reported in the
additional ownership table below.
|
(4)
|
Includes class A shares that may
be acquired through stock options exercisable through April 1, 2017 as
follows: Abney 156,644; Peretz 19,075; Barber 43,604; Gershenhorn
66,331; Gray 64,192; and all directors and executive officers as a group
444,120.
|
(5)
|
None of the individuals listed,
nor members of their immediate families, has any direct ownership rights
in the shares in this column. See footnotes 7 and 8.
|
(6)
|
All directors and executive
officers individually and as a group held less than one percent of
outstanding shares, based on an aggregate of 870,004,995 shares of class A
and class B common stock outstanding as of February 8, 2017. Assumes that
all options exercisable and RSUs through April 1, 2017 owned by the named
individual are exercised. The total number of shares outstanding used in
calculating this percentage also assumes that none of the options owned by
other named individuals are exercised.
|
(7)
|
Includes 3,724,484 class A shares
and 142,036 class B shares owned by the Annie E. Casey Foundation, Inc.,
which are considered under SEC rules to be beneficially owned by David
Abney because he serves on the Board of Trustees.
|
(8)
|
Includes shares owned by the
Annie E. Casey Foundation, Inc.
|
Additional
Ownership
Our directors and executive officers
hold equity instruments that are not reported in the beneficial ownership table
above (with the exception of RSUs for directors) but that represent additional
financial interests in UPS that are subject to the same market risk
as ownership of our common stock. The number of shares of
class A common stock to which these equity instruments are equivalent as of
February 8, 2017 is as follows.
|
Restricted
Stock
Units
(1)
|
|
Phantom
Stock
Units
(2)
|
|
Restricted
Performance
Units
(3)
|
|
Stock Option
Deferral
Shares
(4)
|
|
Other
Deferred
Compensation
Plan
Shares
(5)
|
|
Total
|
David P. Abney
|
0
|
|
0
|
|
42,083
|
|
18,403
|
|
0
|
|
60,486
|
Rodney C. Adkins
|
7,174
|
|
0
|
|
0
|
|
0
|
|
0
|
|
7,174
|
James J. Barber, Jr.
|
0
|
|
0
|
|
16,208
|
|
4,200
|
|
0
|
|
20,408
|
Michael J. Burns
|
17,075
|
|
0
|
|
0
|
|
0
|
|
4,562
|
|
21,637
|
Alan Gershenhorn
|
0
|
|
0
|
|
18,006
|
|
3,182
|
|
4
|
|
21,192
|
Myron A. Gray
|
0
|
|
0
|
|
17,622
|
|
5,607
|
|
38
|
|
23,267
|
William R. Johnson
|
18,035
|
|
0
|
|
0
|
|
0
|
|
0
|
|
18,035
|
Candace Kendle
|
11,449
|
|
0
|
|
0
|
|
0
|
|
0
|
|
11,449
|
Ann
M. Livermore
|
17,075
|
|
2,356
|
|
0
|
|
0
|
|
0
|
|
19,431
|
Rudy H.P. Markham
|
17,075
|
|
0
|
|
0
|
|
0
|
|
0
|
|
17,075
|
Franck J. Moison
|
400
|
|
0
|
|
0
|
|
0
|
|
0
|
|
400
|
Richard N. Peretz
|
0
|
|
0
|
|
7,655
|
|
7,279
|
|
0
|
|
14,934
|
Clark T. Randt, Jr.
|
13,548
|
|
0
|
|
0
|
|
0
|
|
0
|
|
13,548
|
John T. Stankey
|
4,743
|
|
0
|
|
0
|
|
0
|
|
0
|
|
4,743
|
Carol B. Tomé
|
17,075
|
|
1,114
|
|
0
|
|
0
|
|
0
|
|
18,189
|
Kevin M. Warsh
|
8,922
|
|
0
|
|
0
|
|
0
|
|
3,374
|
|
12,296
|
(1)
|
RSUs for directors are also
reported in the previous table and are counted toward the total shares
beneficially owned. RSUs are bookkeeping units, the value of each of which
corresponds to one share of UPS class A common stock. RSUs are granted to
non-employee directors on an annual basis. Dividends paid on UPS common
stock are added to the directors RSU balance. Upon termination of the
individuals service as a director, the RSUs convert to class A
shares.
|
(2)
|
Phantom stock units are
bookkeeping units, the value of each of which corresponds to one share of
UPS class B common stock. Phantom stock units were granted to non-employee
directors pursuant to a deferred compensation program previously provided
to non-employee directors. Dividends paid on UPS common stock are added to
the directors phantom stock unit balance. Upon termination of the
individuals service as a director, amounts represented by phantom stock
units will be distributed in cash over a time period elected by the
recipient.
|
(3)
|
RPUs are bookkeeping units, the
value of each of which corresponds to one share of UPS class A common
stock. We grant RPUs under two programs, the Management Incentive Program
and the Long-Term Incentive Performance award program.
|
(4)
|
Stock option deferral shares are
shares held for the individual in a rabbi trust within the UPS Deferred
Compensation Plan. Each individual elected to defer the receipt of these
shares rather than acquiring them directly upon the exercise of a stock
option.
|
(5)
|
Other deferred compensation plan
shares are amounts within the UPS Deferred Compensation Plan allocated to
UPS common stock. These represent the non-employee directors retainer
fees that have been deferred and invested in UPS
stock.
|
www.upsannualmeeting.com
|
|
55
|
Table of Contents
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities
Exchange Act of 1934 requires our directors, executive officers and persons who
own beneficially more than 10% of either our class A or class B common stock to
file reports of ownership and changes in ownership of such stock with the SEC.
These persons are required by SEC regulations to furnish us with copies of all
Section 16(a) forms they file with
the SEC. To
our knowledge, based solely on a review of those forms provided to us and any
written representations that no other reports were required, for 2016 each of
our directors and executive officers complied with all applicable Section 16(a)
filing requirements.
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Notice of Annual Meeting of Shareowners and 2017 Proxy Statement
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Table of Contents
Proposal 4
Ratification of Auditors
What am I voting
on?
Whether you ratify the Audit
Committees appointment of Deloitte & Touche LLP to serve as our
independent registered public accounting firm.
Voting
Recommendation:
The Board of Directors
recommends that shareowners vote
FOR
the ratification of the
appointment of Deloitte & Touche LLP as our independent registered
public accounting firm for 2017.
Vote Required:
An affirmative vote requires the majority of the
voting power of the shares present in person or by
proxy.
|
Deloitte & Touche LLP (Deloitte)
audited our 2016 consolidated financial statements and our internal control over
financial reporting. As discussed below, our Audit Committee considers Deloitte
to be well qualified and has appointed Deloitte as our independent registered
public accounting firm for the year ending December 31, 2017 and to prepare
reports on these audits.
This proposal asks you to ratify the
appointment of Deloitte as our independent registered public accounting firm for
2017. Although we are not required to obtain such ratification from our
shareowners, the Board of Directors believes it is sound
corporate governance practice to do so. If the appointment of Deloitte is not
ratified, the Audit Committee will reconsider the appointment.
A representative of Deloitte is
expected to be present at the Annual Meeting of Shareowners, will have the
opportunity to make a statement and is expected to be available to respond to
appropriate questions by shareowners. The following sections provide additional
information about our Audit Committee, its selection of Deloitte, Deloittes
fees and related matters.
Report of the Audit
Committee
The Audit Committee of the Board of
Directors is composed solely of independent directors meeting the requirements
of applicable SEC and NYSE rules. Each member is financially literate for audit
committee purposes under NYSE rules, and the board has concluded that each
member qualifies as an audit committee financial expert.
The key responsibilities of the Audit
Committee are set forth in its charter, which was approved by the board and is
available on the governance section of the UPS investor relations website at
www. investors.ups.com. Pursuant to its charter, the Audit Committees purposes,
duties and responsibilities include:
●
|
Assisting the board in
discharging its responsibilities relating to the accounting, reporting and
financial practices of UPS;
|
●
|
Overseeing the accounting and
financial reporting processes, including reviewing earnings or annual
report press releases, overseeing the integrity of UPSs financial
statements and evaluating major financial risks;
|
●
|
Having sole authority to appoint,
oversee, determine the compensation of and terminate the Companys
independent registered public accounting firm; and
|
●
|
Monitoring the Risk Committees
oversight of the Companys enterprise risk management
process.
|
Management has primary responsibility
for preparing UPSs financial statements and establishing effective internal
control over financial reporting. Deloitte is responsible for auditing those
financial statements and UPSs internal control over financial reporting, and
expressing an opinion on the conformity of UPSs audited financial statements
with generally accepted accounting
principles and
on the effectiveness of UPSs internal control over financial reporting based on
criteria established by the Committee of Sponsoring Organizations of the
Treadway Commission.
The Audit Committee is responsible for
appointing the independent registered public accounting firm, understanding the
terms of the audit engagement, negotiating the fees for the audit engagement and
approving the terms of the audit engagement. In this context, the Audit
Committee discussed with Deloitte the terms of the audit engagement, the overall
scope and plan for the audit, and the other matters required to be discussed by
the Public Company Accounting Oversight Boards (PCAOB) auditing standards. The
Audit Committee had the opportunity to ask Deloitte questions relating to such
matters.
The Audit Committee met with management
and Deloitte to review and discuss the Companys audited financial statements
and the Companys internal control over financial reporting. The Audit Committee
discussed with management and Deloitte the critical accounting policies applied
by UPS in the preparation of its financial statements, the quality, and not just
the acceptability, of the accounting principles utilized, the reasonableness of
significant accounting judgments, and the clarity of disclosures in the
financial statements.
The Audit Committee met with Deloitte
and UPSs internal auditors, in each case with and without other members of
management present, to discuss the results of their respective examinations, the
evaluations of the Companys internal control and the overall quality and
integrity of the Companys financial reporting. Additionally, the Audit
Committee reviewed UPSs internal audit plan and the performance,
responsibilities, budget and staffing of UPSs internal
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|
|
57
|
Table of Contents
auditors. The Audit Committee met with
members of management to discuss the Companys legal and ethical compliance
programs. The Audit Committee also oversaw compliance with and procedures for
UPSs receipt, retention and treatment of complaints regarding accounting,
internal accounting controls, auditing and other federal securities law matters,
including confidential and anonymous submissions of these complaints.
Deloitte has provided the Audit
Committee with the written disclosures and the letter required by the PCAOB regarding the independent registered public
accountants communications with the Audit Committee concerning independence,
and the Audit Committee has discussed with Deloitte that firms independence.
The Audit Committee also considered whether Deloittes provision of non-audit
services to UPS was compatible with the independence of the independent
registered public accountants. The Audit Committee has established a policy,
discussed below, requiring the pre-approval of all audit and non-audit services
provided to UPS by Deloitte. The Audit Committee reviewed and pre-approved all
fees paid to Deloitte. These fees are described in the next section of this
proxy statement.
Based on the review and the discussions
described above, the Audit Committee recommended to the Board of Directors that
the audited financial statements be included in UPSs Annual Report on Form 10-K
for the year ended December 31, 2016 for filing with the SEC.
In addition, as in prior years, the
Audit Committee, along with management and UPSs internal auditors, reviewed
Deloittes 2016 performance as part of its consideration of whether to appoint
Deloitte as UPSs independent registered public accounting firm for 2017 and to
recommend to the board that shareowners ratify this appointment. As part of this
review, the Audit Committee considered the continued
independence, objectivity and professional skepticism of Deloitte. The
Audit Committee also considered, among other things, the length of time that
Deloitte has served as UPSs independent auditors, the breadth and complexity of
UPSs business and its global footprint and the resulting demands placed on its
auditing firm in terms of expertise in UPSs business, external data and
managements perception relating to the depth and breadth of Deloittes auditing
qualification and experience, the quantity and quality of Deloittes staff and
global reach, the appropriateness of Deloittes fees, the communication and
interaction with the Deloitte team over the course of the prior year, PCAOB
reports on Deloitte, and the potential impact of changing our independent
registered public accounting firm.
The Audit Committee recognized the
ability of Deloitte to provide both the necessary expertise to audit UPSs
business and the matching global footprint to audit UPS worldwide, as well as
other factors, including the policies that Deloitte follows with respect to
rotation of its key audit personnel, so that there is a new partner-in-charge at
least every five years. The Audit Committee is involved in the selection of the
new partner-in-charge of the audit engagement when there is a rotation required
under applicable rules. Based on the results of its review, the Audit Committee
concluded that Deloitte is independent and that it is in the best interests of
UPS and its shareowners to appoint Deloitte to serve as UPSs independent
registered accounting firm for 2017. Consequently, the Audit Committee has
appointed Deloitte as UPSs independent auditors for 2017 and the board is
recommending that UPSs shareowners ratify this appointment.
The Audit
Committee
Carol B. Tomé, Chair
Michael
J. Burns
Candace Kendle
Rudy H.P. Markham
Principal
Accounting Firm Fees
Aggregate fees billed to us for the
fiscal years ended December 31, 2016 and 2015 by Deloitte, the member firms of
Deloitte Touche Tohmatsu, and their respective affiliates were:
|
|
2016
|
|
2015
|
Audit Fees
(1)
|
|
$
|
14,493,000
|
|
$
|
13,939,000
|
Audit-Related Fees
(2)
|
|
$
|
1,380,000
|
|
$
|
1,351,000
|
Total Audit and Audit-Related Fees
|
|
$
|
15,873,000
|
|
$
|
15,290,000
|
Tax
Fees
(3)
|
|
$
|
592,000
|
|
$
|
797,000
|
All
Other Fees
|
|
$
|
0
|
|
$
|
0
|
Total Fees
|
|
$
|
16,465,000
|
|
$
|
16,087,000
|
(1)
|
Consists of fees for the audit of
our annual financial statements, internal control attestation procedures,
statutory audits of foreign subsidiary financial statements and services
associated with securities filings such as comfort letters and
consents.
|
(2)
|
Consists of fees for employee
benefit plan audits, independent service auditors reports and accounting
consultations.
|
(3)
|
Consists of fees for tax
compliance work and tax planning and advice
services.
|
Our Audit Committee has established a
policy requiring the pre-approval of all audit and non-audit services provided
to us by Deloitte. The policy provides for pre-approval of audit, audit-related
and tax services specifically described by the Audit Committee. The Audit
Committee has delegated to its chair the authority to pre-approve permitted services
between the Audit Committees regularly scheduled meetings, and the chair must
report any pre-approval decisions to the Audit Committee at its next scheduled
meeting for review by the Audit Committee. The policy prohibits the Audit
Committee from delegating to management the Audit Committees responsibility to
pre-approve permitted services of our independent registered public accounting
firm.
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Notice of Annual Meeting of Shareowners and 2017 Proxy Statement
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Table of Contents
Proposal 5 Shareowner Proposal to
Prepare an Annual Report on Lobbying Activities
What am I voting on?
Whether you want the board to prepare an annual report
on UPS lobbying activities.
Voting Recommendation:
The Board of Directors recommends that shareowners
vote
AGAINST
this proposal because:
●
|
UPS is transparent and
accountable with respect to lobbying and political
activities
|
●
|
UPS was named a top company for
political transparency and accountability six years in a
row
|
●
|
UPS protects and promotes
shareowner value by participating in the political
process
|
●
|
The board provides independent
oversight of UPSs lobbying and political
activities
|
Vote Required:
The affirmative vote of the majority of the voting power
of the shares present in person or by proxy.
Walden Asset Management, One Beacon
Street, Boston, MA 02108, has advised us that it is the holder of 214,200 shares
of our class B common stock and that it, along with co-proponents whose names,
addresses and share ownership will be promptly provided upon oral or written
request to the UPS Corporate Secretary at the UPS executive offices, intends to
submit the proposal set forth below for consideration at the Annual
Meeting.
Whereas,
businesses have a recognized legal right to express opinions to
legislators and regulators on public policy matters.
We believe in full disclosure of our
companys lobbying activities and expenditures to assess whether our lobbying is
consistent with UPSs expressed goals and in the best interests of
shareholders.
Resolved,
the shareholders of United Parcel Service (UPS) request the
Board prepare a report, updated annually, disclosing:
|
1.
|
Company policy and procedures
governing lobbying, both direct and indirect, and grassroots lobbying
communications.
|
|
2.
|
Payments by UPS used for (a)
direct or indirect lobbying or (b) grassroots lobbying communications, in
each case including the amount of the payment and the
recipient.
|
|
3.
|
UPSs membership in and payments
to any tax-exempt organization that writes and endorses model
legislation.
|
|
4.
|
Description of the decision
making process and oversight by management and the Board for making
payments described in section 2 above.
|
For purposes of this proposal, a
grassroots lobbying communication is a communication directed to the general
public that (a) refers to specific legislation or regulation, (b) reflects a
view on the legislation or regulation and (c) encourages the recipient of the
communication to take action with respect to the legislation or regulation.
Indirect lobbying is lobbying engaged in by a trade association or other
organization of which UPS is a member.
Direct and indirect lobbying and
grassroots lobbying communications include efforts at the local, state and
federal levels.
The report shall be presented to the
Audit Committee or another relevant Board committee and posted on the companys
website.
Shareowners Supporting
Statement
|
As shareholders, we encourage
transparency and accountability in the use of staff time and corporate funds to
influence legislation and regulation both directly and indirectly. We appreciate
UPS updating the websites disclosure on political spending and lobbying but
crucial information on UPSs payments used for lobbying through trade
associations is still secret.
UPS spent approximately $35.3 million
in 2010 to 2015 on direct federal lobbying activities.
(Senate Reports)
. These
figures may not include grassroots lobbying to directly influence legislation
by mobilizing public support or opposition and do
not include lobbying expenditures in
states that do not require disclosure.
For example, UPS does not disclose or
explain to investors its contributions to the highly controversial American
Exchange Legislative Council (ALEC) which adopted model legislation opposing
renewable energy regulations and laws for states. UPS sits on ALECs Private
Enterprise Board.
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Over 100 companies have left ALEC
because of its controversial positions including BP, Coca Cola, General
Electric, Google, Johnson & Johnson, McDonalds, Procter & Gamble, Shell,
Unilever and Wal-Mart.
Finally, UPS sits on the Board of the
U.S. Chamber of Commerce, which spent well over $1.2 billion lobbying since
1998. The Chamber is aggressively attacking the EPA and has sued to block the
Clean Power Plan which addresses climate change. We urge UPS to utilize its role
as a prominent Chamber Board member to challenge the Chambers negative climate
policy.
This proposal is unnecessary because of
UPSs already extensive disclosures regarding lobbying and political activities,
the oversight provided by the Board of Directors, and the Companys existing
policies. Preparing a special report beyond UPSs current voluntary and
mandatory disclosures is not an efficient use of resources. Additionally, UPSs
shareowners previously rejected this proposal in 2012, 2013, 2014, 2015 and
2016.
UPS was named a top company for
political transparency and accountability six years in a
row.
The Center for Political
Accountability Zicklin Index of Corporate Political Accountability and
Disclosure ranked UPS #3 among S&P 500 companies for political transparency
and accountability in 2016. This is the sixth year that UPS was named as one of
the top companies. A copy of the 2016 ranking can be found at www.
politicalaccountability.net.
UPS protects and promotes shareowner
value by participating in the political process.
UPSs business is subject to extensive regulation at the federal, state
and local levels. We believe that UPS has a responsibility to its shareowners
and employees to be engaged in the political process, including lobbying
activities. UPS understands that individual shareowners may disagree with one or
more positions expressed by certain organizations. In fact, given the variety of
business issues in which many trade associations and other groups are engaged,
UPS does not necessarily agree with all positions taken by every organization
where UPS is a member. In these circumstances, the Company must weigh the
utility of continued membership against the consequences of differing positions
or opinions.
UPS is transparent and
accountable.
UPS complies with all
applicable law with respect to disclosing political and lobbying activities and,
in some cases, goes beyond what is required. The following examples demonstrate
UPSs commitment to political transparency and accountability:
●
|
UPS Provides Significant Disclosures About
Political
Spending:
UPS publishes semi-annual reports disclosing the
amounts and recipients of any federal and
state political contributions and expenditures made with corporate funds
in the United States. UPS also discloses any payments to trade
associations that receive $50,000 or more from the Company and that use a
portion of the payment for political
expenditures pursuant to 26 U.S.C. § 162(e)(1)(B). These
reports can be found at
www.investors.ups.com. As disclosed
in our
most recent report, UPS did not make any federal or state contributions or
non-deductible political payments to covered trade associations during the
July 1 December 31, 2016 time period.
|
●
|
UPS Provides Detailed Information About
Lobbying Activities:
UPS files publicly
available federal Lobbying Disclosure Act Reports each quarter. Links to
these reports can be found on UPSs web site at www.investors.ups.com. The
reports provide information about expenditures for the quarter, describe
the specific pieces of legislation that were the topic of communications,
and identify the employees who lobbied on UPSs behalf. UPS files similar
periodic reports with state agencies reflecting state lobbying
activities.
|
●
|
UPS Has Not Engaged in Grassroots
Lobbying:
In recent years, UPS has not
engaged in any communications directed to the general public with respect
to influencing specific legislation or regulations (defined in the
shareowner proposal as a grassroots lobbying
communication).
|
The Board provides independent
oversight of UPSs lobbying and political activities.
The President of UPSs Public Affairs Group regularly reports
to the Board of Directors and the Nominating and Corporate Governance Committee
regarding UPSs lobbying and political activities. In addition, the Nominating
and Corporate Governance Committee of the Board of Directors, which is composed
entirely of independent directors, reviews and approves UPSs semi-annual
political contribution report.
The Board of Directors also monitors
UPSs memberships in trade associations and other tax exempt organizations that
engage in lobbying. UPS must often decide whether to participate in a variety of
trade associations and other tax exempt organizations that engage in lobbying.
The Company may participate when involvement is consistent with specific UPS
business objectives. These decisions are subject to board oversight and are
regularly reviewed by the Nominating and Corporate Governance
Committee.
Furthermore, UPSs decision-making
process for lobbying activities is transparent. UPSs Public Affairs Group works
with senior management on furthering business objectives and on protecting and
enhancing long-term shareowner value. This is accomplished by focused
involvement at all levels of government. Moreover, the UPS Public Affairs Group
must approve all lobbying activities and any payments to trade associations or
other tax-exempt organizations that engage in lobbying activities.
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Additional lobbying disclosure is
unnecessary.
UPS participates in the
political process in accordance with good corporate governance practices. The
board believes UPSs lobbying activities are transparent and the adoption of
this
proposal is unnecessary given the
information that is already publicly available. In addition, adoption of this
proposal is not an efficient use of resources and will only serve to benefit the
limited interests of a small group of shareowners.
Proposal 6 Shareowner Proposal to
Reduce the Voting Power of Class A Stock from Ten Votes Per Share to One Vote
Per Share
What am I voting on?
Whether you want the board to take steps to reduce the voting
power of the Companys class A stock from ten votes per share to one vote per
share.
Voting Recommendation:
The Board of Directors recommends that you
vote
AGAINST
this proposal because:
●
|
UPSs ownership structure has
contributed to its long-term success
|
●
|
UPS class A shares are widely
held with over 155,000 class A shareowners as of February 8,
2017
|
●
|
Elimination of this structure
will not improve the corporate governance or the long-term financial
performance of the Company
|
Voting Required:
The affirmative vote of the majority of those shares
present in person or represented by proxy and entitled to vote.
John Chevedden, 2215 Nelson Avenue, No.
205, Redondo Beach, CA 90278, has advised us that he is the holder of not less
than 50 shares of our class B common stock and that he intends to submit the
proposal set forth below for consideration at the Annual Meeting.
Proposal 6 Give Each Share An Equal
Vote
RESOLVED: Shareholders request that our
Board take steps to ensure that all of our companys outstanding stock has
one-vote per share in each voting situation. This would encompass all
practicable steps including encouragement and negotiation with shareholders, who
have more than one vote per share, to request that they relinquish, for the
common good of all shareholders, any preexisting rights, if
necessary.
This proposal is not intended to
unnecessarily limit our Boards judgment in crafting the requested change in
accordance with applicable laws and existing contracts. This proposal is
important because certain shares have super-sized voting power with
10-votes per share compared to one-vote per share for other
shareholders. Plus there are further voting limitations on the shares with
one-vote per share.
With stock having 10-times more voting
power our company takes our shareholder money but does not give us in return an
equal voice in our companys management. Without a voice, shareholders cannot
hold management accountable. Plus we had no right to call a special meeting or
act by written consent. And we had provisions mandating an 80%-vote in order to
make a certain improvements to our corporate governance. The 2016 proposal on
this topic won 500 million UPS yes-votes.
Also, the 2016 proposal on this topic,
submitted to Ford Motor, won the all-time highest support for any Ford
shareholder proposal 1.7 Billion yes-votes.
Please vote to protect shareholder
value:
Give Each Share An Equal Vote
Proposal 6
UPS is an employee owned and managed
company. Current and former employees and their families have been the primary
shareowners of the Company since its founding in 1907. As a result, our current
and former employees have a significant interest in UPSs long-term
success.
The Companys current ownership
structure, which has been in place since UPS became a public company in 1999,
includes class A and class B common stock. The class A shares are held by
current and former UPS employees and their families, many
of whom owned UPS shares before the Companys initial public
offering. The Companys class B shares
are publicly traded. Class A shareowners are
entitled to ten votes per share and class B shareowners are entitled to one vote
per share.
UPSs ownership structure has
contributed to its long-term success.
Our
ownership structure allows the Company to pursue long-term growth strategies and
avoid the drawbacks associated with excessive emphasis on short-term goals. In
this regard, the
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interests of UPS employees and class B
shareowners are aligned. Management is able to run the Company with a sense of
purpose by focusing on sustainable value creation that benefits all of the
Companys constituents. We believe that the benefits of our ownership structure
are reflected in various financial metrics used to measure UPS, especially when
compared with our competitors.
Our class A shareowners interests go
well beyond UPSs current stock price and focus on the long-term success of the
Company. Since its humble beginnings in 1907, UPS has become the worlds largest
package delivery company, a leader in the U.S. less-than-truckload industry and
the premier provider of global supply chain management solutions. We owe our
success, to a significant degree, to the commitment our ownership structure
inspires in our employee owners.
UPS Class A shares are widely
held.
The board strongly disagrees with
this proposals characterization of UPSs ownership structure. Some companies
maintain multiple classes of stock in order to concentrate voting power with a
limited number of people (such as company founders) who have unique interests
that may not necessarily align with those of
other shareowners. In contrast, UPSs class A shares are widely held by
current and former employees, from hourly employees to executive officers. In
fact, there were over 155,000 holders of class A shares as of February 8,
2017.
Finally, UPSs ownership structure
should be considered in light of our strong corporate governance practices, as
discussed beginning on page 12 of our proxy statement. All but one UPS director
nominee is independent, all UPS directors are elected annually by a majority of
votes cast in uncontested director elections, only independent directors
serve on the boards Audit Committee, Compensation Committee, Nominating and
Corporate Governance Committee and Risk Committee, and we have an independent
lead director.
For the reasons discussed above, the
board believes that UPSs ownership structure continues to be in the best
interests of the Company and its shareowners. Elimination of this structure will
not improve the corporate governance or the long-term financial performance of
the Company. The board also believes that our shareowners agreed with this
assessment when they rejected similar proposals at our Annual
Meeting
of
Shareowners in 2013, 2014, 2015 and 2016.
Proposal 7 Shareowner Proposal to
Adopt Holy Land Principles
What am I voting on?
Whether you want the board to take steps to
implement the Holy Land Principles.
Voting Recommendation:
The Board of Directors recommends that you
vote
AGAINST
this proposal because:
●
|
UPS has existing policies to
promote fair employment practices, equal employment opportunities and
diversity
|
●
|
UPS values and promotes diversity
and workplace equality
|
●
|
UPSs policies substantially
address the objectives of this
proposal
|
Voting Required:
The affirmative vote of the majority of those shares
present in person or represented by proxy and entitled to vote.
The Holy Land Principles, Inc., P.O.
Box 15128 Washington, D.C. 20003-0849, has advised us that it is the holder of
49 shares of our class B common stock and that it intends to submit the proposal
set forth below for consideration at the Annual Meeting.
WHEREAS, UPS has operations in
Palestine-Israel;
WHEREAS, achieving a lasting peace in
the Holy Land with security for Israel and justice for Palestinians
encourages us to promote a means for establishing justice and
equality;
WHEREAS, fair employment should be the
hallmark of any American company at home or abroad and is a requisite for any
just society;
WHEREAS, Holy Land Principles Inc., a
non-profit organization, has proposed a set of equal opportunity employment
principles to serve as guidelines for corporations in
Palestaine-Israel.
These are:
|
1.
|
Adhere to equal and fair
employment practices in hiring, compensation, training, professional
education, advancement and governance without discrimination based on
national, racial, ethnic or religious identity.
|
|
2.
|
Identify underrepresented
employee groups and initiate active recruitment efforts to increase the
number of underrepresented employees.
|
|
3.
|
Develop training programs that
will prepare substantial numbers of current minority employees for skilled
jobs, including the expansion of existing programs and the creation of new
programs to train, upgrade, and improve the skills of minority
employees.
|
|
4.
|
Maintain a work environment that
is respectful of all national, racial, ethnic and religious
groups.
|
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5.
|
Ensure that layoff, recall and
termination procedures do not favor a particular national, racial, ethnic
or religious group.
|
6.
|
Not make military service a
precondition or qualification for employment for any position, other than
those positions that specifically require such experience, for the
fulfillment of an employees particular responsibilities.
|
7.
|
Not accept subsidies, tax
incentives or other benefits that lead to the direct advantage of one
national, racial, ethnic or religious group over another.
|
8.
|
Appoint staff to monitor,
oversee, set timetables, and publicly report on their progress in
implementing the Holy Land Principles.
|
RESOLVED: Shareholders request the
Board of Directors to: Make all possible lawful efforts to implement and/or
increase activity on each of the eight Holy Land Principles.
Shareowners Supporting
Statement
|
The proponent believes that United
Parcel Service benefits by hiring from the widest available talent pool. An
employees ability to do the job should be the primary consideration in hiring
and promotion decisions.
Implementation of the Holy Land
Principles which are both pro-Jewish and pro-Palestinian will demonstrate
concern for human rights and equality of opportunity in its international
operations.
Please vote your proxy
FOR
these
concerns.
UPS has existing policies to promote
fair employment practices, equal employment opportunities and
diversity.
This proposal is unnecessary
because of UPSs existing policies and practices focused on equal employment
opportunities and the Companys commitment to diversity. UPS is committed to a
policy of treating individuals fairly and recruiting, selecting, training,
promoting and compensating based on merit, experience and other work-related
criteria. We comply with all laws governing fair employment and labor practices.
We do not discriminate against any applicant for employment or any employee in
any aspect of their employment at UPS because of age, race, religion, sex,
disability, sexual orientation, gender identity, military status, pregnancy,
national origin or veteran status. All UPS employees are vested with the
opportunity and responsibility to ensure a workplace of fairness, dignity, and
respect for one another and to foster an environment of inclusion.
UPS values and promotes diversity
and workplace equality.
Our Company also
places great value on diversity and has adopted policies that promote human
rights, diversity, and fair treatment in the workplace. We see the dynamics of
different geographies, cultures, and perspectives at play every day in the
course of doing business. The Companys diversity and inclusion initiatives
benefit the economic sustainability of our business by strengthening our
workplace environment which in turn, helps us to better understand and meet the
needs of our customers. Thus, we believe that our diverse workforce is integral
to our success. Furthermore, as emphasized in our Code of Business Conduct
(which is available in various languages on the governance section of our
investor relations website, at www.investors. ups.com), UPS supports the
protection of basic human rights
throughout our
world-wide operations and strives to ensure that human rights which address
such areas as equality, employee well-being and security, personal freedom from
persecution, and economic, social and cultural freedom are respected and
protected.
In addition to our policies, procedures
and values, UPS has allocated resources to the promotion of workplace equality
and its commitment to diversity. Company leaders from a variety of functions and
global locations champion the Companys global equality, diversity and inclusion
initiatives, and bring awareness about the organizations diversity and
inclusion policies and processes to the entire organization.
UPSs policies are implemented
globally.
We believe that UPSs operations
substantially conform to the objectives in the Holy Land Principals Proposal.
UPS promotes equal and fair employment practices globally; we are active in
promoting diversity and inclusion; and we strive for a work environment free of
harassment and discrimination. In addition, UPS monitors and reports progress on
the Companys efforts that support our goal of creating more of a humanized
workplace through our annual Corporate Sustainability Report available at
www.sustainability.ups.com.
Accordingly, implementation of the Holy
Land Principles is unnecessary and not in the best interests of the Company, its
shareowners or its employees. The board also believes that our shareowners
agreed with this assessment when they rejected the same proposal
at our Annual
Meeting
of
Shareowners in 2016.
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Important Information About Voting at the
2017 Annual Meeting
|
What is included in the proxy materials, and why am I
receiving them?
|
The proxy materials for our Annual
Meeting of Shareowners include this proxy statement and notice of the 2017
Annual Meeting, as well as our 2016 Annual Report. If you received paper copies
of these materials, you also received a proxy card or voting instruction form.
We began distributing the proxy statement, Annual Meeting notice and proxy card,
or a Notice of Internet Availability of Proxy Materials (the Notice), on March
13, 2017.
When you vote you appoint each of David P.
Abney and Norman M. Brothers, Jr. to vote your shares at the Annual Meeting as
you have instructed them. If a matter that is not on the form of proxy is voted
on, then you appoint them to vote your shares in accordance with their best
judgment. This allows your shares to be voted whether or not you attend the
Annual Meeting.
Why did
some shareowners receive a Notice of Internet Availability of Proxy
Materials while others received a printed set of proxy
materials?
|
We are allowed to furnish our proxy
materials to requesting shareowners over the Internet, rather than by mailing
printed copies, so long as we send them a Notice. The Notice tells how to access
and review the proxy statement and annual report and vote over the Internet at
www.proxyvote.com. If you received
the Notice and
would like to receive printed proxy materials, follow the instructions in the
Notice.
If you received printed proxy materials
you will not receive the Notice, but you may still access our proxy materials
and submit your proxy over the Internet at www.proxyvote.com.
Can I receive future proxy materials and annual reports
electronically?
|
Yes. This proxy statement and the 2016
Annual Report are available on our investor relations website at www.investors.
ups.com. Instead of receiving a Notice or paper copies of the proxy materials in
the mail, shareowners can elect to receive emails that provide links to our
future annual reports and proxy materials on the Internet. Opting to receive
your proxy materials electronically will reduce costs and the environmental
impact of our annual meetings and will give you an automatic link to the proxy
voting site.
If you are a shareowner of record and
wish to enroll in the electronic proxy delivery service for future meetings, you
may do so by going to www.icsdelivery.com/ups and following the prompts. If you
hold class B shares through a bank or broker, please refer to your voting
instruction form, the Notice or other information provided by your bank or
broker for instructions on how to elect this option.
Holders of our class A common stock and
our class B common stock at the close of business on March 6, 2017 are entitled
to vote. This is referred to as the Record Date.
A list of shareowners entitled to vote
at the Annual Meeting will be available in electronic form at the Annual Meeting
on
May 4, 2017 and will be accessible in
electronic form for ten days prior to the meeting at our principal place of
business, 55 Glenlake Parkway, N.E., Atlanta, Georgia 30328, and at the offices
of Morris, Nichols, Arsht & Tunnell, 1201 North Market Street, Wilmington,
Delaware 19899, between the hours of 9:00 a.m. and 5:00 p.m.
To how many votes is each share of common stock
entitled?
|
Holders of class A common stock are
entitled to ten votes per share. Holders of class B common stock are entitled to
one vote per share. On the Record Date, there were 179,600,527 shares of our class A
common stock and 689,696,627 shares of our class B common stock outstanding and entitled
to vote.
The voting rights of any shareowner or
group of shareowners, other than any of our employee benefit plans, that
beneficially owns shares representing more than 25% of our voting power are
limited so that the shareowner or group may cast only one one-hundredth of a
vote with respect to each vote in excess of 25% of the outstanding voting
power.
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If you hold
class B shares through a bank or broker, please refer to your voting instruction
form, the Notice or other information forwarded by your bank or broker to see
which voting options are available to you. Shareowners of record may vote as
described below:
●
|
In Person.
You may vote
in person if you attend the Annual Meeting.
|
●
|
By Internet.
You can
vote in advance of the Annual Meeting via the Internet at
www.proxyvote.com. Internet voting is available 24 hours a day and will be
accessible until 11:59 p.m. Eastern Time on May 3, 2017.
|
●
|
By Smartphone or Tablet.
Scan the QR code below to vote using your smartphone or tablet any time
until 11:59 Eastern Time on May 3, 2017.
|
●
|
By Telephone.
If you
received a proxy card by mail, the toll-free telephone number is noted on
your proxy card. Telephone voting is available 24 hours a day at
1-800-690-6903 and will be accessible until 11:59 p.m. Eastern Time on May
3, 2017.
|
●
|
By Mail.
If you received
a proxy card by mail and choose to vote in advance by mail, simply mark
your proxy card, date and sign it, and return it in the postage-paid
envelope.
|
If you hold
class A shares in the UPS Stock Fund in the UPS 401(k) Savings Plan, you may
vote your shares over the Internet, by telephone, by mail or in person at the
Annual Meeting as if you were a registered shareowner.
Even if you
plan to attend the Annual Meeting, we encourage you to vote in advance. If you
vote by Internet or by telephone, you do not need to return your proxy
card.
The method you
use to vote in advance will not limit your right to vote at the Annual Meeting
if you decide to attend in person. Written ballots will be passed out to anyone
who wants to vote at the Annual Meeting. If you hold your shares through a bank,
broker or other holder of record, you must obtain a proxy, executed in your
favor, from the bank, broker or other holder of record to be able to vote at the
Annual Meeting.
BENEFICIAL SHAREOWNERS VOTING
OPTIONS
If you
are a beneficial owner, you will receive instructions from your bank,
broker or other nominee that you must follow in order for your shares to
be voted. Many of these institutions offer telephone and online
voting.
|
Can
I revoke my proxy or change my vote?
|
Shareowners of
record may revoke their proxy or change their vote at any time before the polls
close at the Annual Meeting by:
●
|
submitting a subsequent proxy by
Internet, by smartphone or tablet, by telephone or by mail with a later
date;
|
●
|
sending a written notice to our
Corporate Secretary at 55 Glenlake Parkway, N.E., Atlanta, Georgia 30328;
or
|
●
|
voting in person at the Annual
Meeting.
|
If you hold
class B shares through a bank or broker, please refer to your proxy card, the
Notice or other information forwarded by your bank or broker to see how you can
revoke your proxy and change your vote.
How
many votes do you need to hold the Annual
Meeting?
|
The presence,
in person or by proxy, of the holders of a majority of the votes entitled to be
cast at the Annual Meeting will constitute a quorum. A quorum is necessary to
hold the Annual Meeting and conduct business. If a quorum is not present, the
Annual Meeting may be adjourned from time to time until a quorum is
present.
What
happens if I do not provide voting instructions or if a nominee is unable
to stand for election?
|
If you sign and
return a proxy but do not provide voting instructions, your shares will be voted
as recommended by the board.
If a director
nominee is unable to stand for election, the board may either reduce the number
of directors that serve on the board or designate a substitute nominee. If the
board designates
a substitute nominee, shares
represented by proxies voted for the nominee who is unable to stand for election
will be voted for the substitute nominee.
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Will
my shares be voted if I do not vote by Internet, by smartphone or tablet,
by telephone or by signing and returning my proxy
card?
|
If you are a
shareowner of record of class A shares or class B shares and you do not vote,
then your shares will not count in deciding the matters presented for shareowner
consideration at the Annual Meeting.
If your class
A shares are held in the UPS Stock Fund in the UPS 401(k) Savings Plan and you
do not vote, then the Plan trustee will vote your shares for each proposal in
the same proportion as the shares held under the Plan for which voting
instructions were received.
If your class
B shares are held in street name through a bank or broker, your bank or broker
may vote your class B shares under certain limited circumstances if you do not
provide voting instructions before the Annual Meeting. These circumstances
include voting your shares on routine matters as defined by NYSE rules related
to voting by banks and brokers, such as the ratification of the appointment of
our independent registered public accounting firm described in this proxy
statement. With
respect to this proposal,
therefore, if you do not vote your shares, your bank or broker may vote your
shares on your behalf or leave your shares unvoted.
The remaining
proposals are not considered routine matters under NYSE rules relating to
voting by banks and brokers. When a proposal is not a routine matter and the
brokerage firm has not received voting instructions, the brokerage firm cannot
vote the shares on that proposal. Shares that banks and brokerage firms are not
authorized to vote are called broker non-votes. Broker non-votes that are
represented at the Annual Meeting will be counted for purposes of establishing a
quorum but not for determining the number of shares voted for or against the
non-routine matter.
We encourage
you to provide instructions to your bank or brokerage firm by voting your proxy
so that your shares will be voted at the Annual Meeting in accordance with your
wishes.
What
is the vote required for each proposal to pass, and what is the effect of
abstentions and uninstructed shares on each of the
proposals?
|
Our Bylaws
provide for majority voting in uncontested director elections. Therefore, a
nominee will only be elected if the number of votes cast for the nominees
election is greater than the number of votes cast against that nominee. See
Corporate Governance Majority Voting and Director Resignation Policy for an
explanation of what would happen if more votes are cast against a nominee that
for the nominee. Abstentions are not considered votes cast for or against the
nominee. For each other
proposal to pass, in
accordance with our Bylaws, the proposal must receive the affirmative vote of a
majority of the voting power of the shares present in person or by proxy at the
Annual Meeting and entitled to vote.
The following
table summarizes the votes required for each proposal to pass and the effect of
abstentions and uninstructed shares on each proposal.
Proposal
Number
|
|
Item
|
|
Votes Required for
Approval
|
|
Abstentions
|
|
Uninstructed
shares
|
1.
|
|
Election of 12
directors
|
|
Majority of votes
cast
|
|
No effect
|
|
No effect
|
2.
|
|
Say on Pay
|
|
Majority of the voting power of
|
|
Same as
|
|
|
|
|
|
|
the shares present in
person or by proxy
|
|
votes against
|
|
No effect
|
3.
|
|
Say When on Pay
|
|
Majority of the voting power of
|
|
Same as
|
|
|
|
|
|
|
the shares present in
person or by proxy
|
|
votes against
|
|
No effect
|
4.
|
|
Ratification of independent registered
|
|
Majority of the voting power of
|
|
Same as
|
|
Discretionary voting
|
|
|
public accounting
firm
|
|
the shares present in
person or by proxy
|
|
votes against
|
|
by broker
permitted
|
5. - 7.
|
|
Shareowner proposals
|
|
Majority of the voting power of
|
|
Same as
|
|
|
|
|
|
|
the shares present in
person or by proxy
|
|
votes against
|
|
No
effect
|
66
|
|
Notice of Annual Meeting of Shareowners and 2017 Proxy Statement
|
Table of
Contents
What
do I need to bring to attend the Annual Meeting in
person?
|
You need proof
of your share ownership (such as a recent brokerage statement or a letter from
your broker showing that you owned shares of United Parcel Service, Inc. common
stock as of the Record Date) and a form of government-issued photo
identification. If you do not have proof of ownership and
valid photo identification, you may not be admitted to the Annual Meeting. All
bags, briefcases and packages will be held at registration and will not be
allowed in the Annual Meeting.
What
does it mean if I receive more than one Notice, proxy card or voting
instruction form?
|
This means that
your shares are registered in different names or are held in more than one
account. To ensure that all shares are voted, please vote each account by using
one of the voting methods as described above.
When
and where will I be able to find the voting
results?
|
You can find
the official results of the voting at the Annual Meeting in our Current Report
on Form 8-K that we will file with the SEC within four business days after the
Annual Meeting. If
the official results are not
available at that time, we will provide preliminary voting results in the Form
8-K and will provide the final results in an amendment as soon as they become
available.
www.upsannualmeeting.com
|
|
67
|
Table of
Contents
Other Information for
Shareowners
|
Solicitation of Proxies
We will pay
our costs of soliciting proxies. Directors, officers and other employees, acting
without special compensation, may solicit proxies by mail, email, in person or
by telephone. We will reimburse brokers, fiduciaries, custodians and other
nominees for out-of-pocket expenses incurred in sending our proxy materials
and Notice to, and obtaining voting instructions
relating to the proxy materials and Notice from, shareowners. In addition, we
have retained Georgeson to assist in the solicitation of proxies for the Annual
Meeting at a fee of approximately $10,000 plus associated costs and
expenses.
Householding
We have
adopted a procedure approved by the SEC called householding under which
multiple shareowners who share the same last name and address and do not
participate in electronic delivery will receive only one copy of the annual
proxy materials or Notice unless we receive contrary instructions from one or
more of the shareowners. If you wish to opt out of householding and continue to
receive multiple copies of the proxy materials or Notice at the same address, or
if you have
previously opted out and wish to
participate in householding, you may do so by notifying us in writing or by
telephone at: UPS Investor Relations, 55 Glenlake Parkway, N.E., Atlanta,
Georgia 30328, (404) 828-6059, and we will promptly deliver the requested
materials. You also may request additional copies of the proxy materials or
Notice by notifying us in writing or by telephone at the same address or
telephone number.
Shareowner Proposals and Nominations for Director at the 2018
Annual Meeting
Shareowners
who, in accordance with Rule 14a-8 under the Securities Exchange Act of 1934,
wish to present proposals for inclusion in the proxy materials to be distributed
in connection with the 2018 Annual Meeting of Shareowners must submit their
proposals so that they are received by our Corporate Secretary at 55 Glenlake
Parkway, N.E., Atlanta, Georgia 30328 no later than the close of business on
November 13, 2017. Any proposal will need to comply with SEC regulations
regarding the inclusion of shareowner proposals in company-sponsored proxy
material.
Shareowners
who wish to propose business or nominate persons for election to the Board of
Directors at the 2018 Annual Meeting of Shareowners, and the proposal or
nomination is not intended to be included in our 2018 proxy materials, must
provide a notice of shareowner business or nomination in accordance with Section
10.1 of our Bylaws. In order to be properly brought before the 2018 Annual
Meeting of Shareowners, Section 10.1 of our Bylaws requires that a notice of a
matter the shareowner wishes to present (other than a matter brought pursuant to
Rule 14a-8), or the person or persons the shareowner wishes to nominate as a
director, must be received by our Corporate Secretary not less than 120 days
prior to the first anniversary of the date on which
we first mailed the proxy statement for the preceding years Annual
Shareowners Meeting. Therefore, any notice intended to be given by a shareowner
with respect to the 2018 Annual Meeting of Shareowners pursuant to our Bylaws
must be received by our Corporate Secretary at 55 Glenlake Parkway, N.E.,
Atlanta, Georgia 30328 no later than November 13, 2017. However, if the date of
our 2018 Annual Meeting occurs more than 30 days before or 30 days after May 4,
2018, the anniversary of the 2017 Annual Meeting, a shareowner notice will be
timely if it is received by our Corporate Secretary by the later of (a) the
close of business on the 120th day prior to the date of the 2018 Annual Meeting
and (b) the close of business on the 10th day following the day on which we
first make a public announcement of the date of the 2018 Annual
Meeting.
To be in
proper form, a shareowners notice must be a proper subject for shareowner
action at the Annual Meeting and must include the specified information
concerning the proposal or nominee as described in Section 10.1 of our Bylaws.
Our Bylaws are available on the governance page of our investor relations
website at www.investors.ups.com.
2016 Annual Report on Form 10-K
A copy of our 2016 Annual Report on
Form 10-K, including financial statements, as filed with the SEC may be obtained
without charge upon written request to: Corporate Secretary, 55 Glenlake
Parkway, N.E., Atlanta, Georgia 30328. It is also available on our investor
relations website at www.investors.ups.com.
68
|
|
Notice of Annual Meeting of Shareowners
and 2017 Proxy Statement
|
Table of
Contents
Other Business
Our Board of
Directors is not aware of any business to be conducted at the Annual Meeting
other than the proposals described in this Proxy Statement. Should any other
matter requiring a vote of the shareowners arise, the persons named in the
accompanying proxy card will vote in accordance with their best judgment. A
proxy granted by a shareowner in connection with the Annual Meeting will give
discretionary authority to the named proxy holders to vote on any such matters
that are properly presented at the Annual Meeting, subject to SEC
rules.
www.upsannualmeeting.com
|
|
69
|
Table of
Contents
Table of
Contents
ANNUAL MEETING OF SHAREOWNERS
|
|
|
Thursday, May 4, 2017, at 8:00
a.m. eastern time
|
|
|
|
The Hotel du Pont
11th and
Market Streets
Wilmington, Delaware
19801
|
Table of
Contents
UNITED PARCEL SERVICE, INC.
|
ANNUAL MEETING OF
SHAREOWNERS AS OF MARCH 6, 2017
|
TO BE HELD ON MAY 4, 2017
|
|
Your vote is important. Thank you for
voting.
|
|
Read the proxy
statement and have the voting instruction form below at hand. Please note
that the telephone and Internet voting ends at 11:59 p.m. ET on May 3,
2017.
|
|
Vote by
Internet:
|
www.proxyvote.com, or scan the QR Barcode
above.
|
|
|
Vote by Phone:
|
1-800-454-8683
|
|
|
Vote by Mail:
|
Use the envelope
enclosed
|
TO
VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
E18523-P88329
|
Important Notice
Regarding the Availability of Proxy Materials for the Shareowner Meeting.
The following materials are available at www.proxyvote.com: Notice and
Proxy Statement and Annual Report
|
The board of
directors recommends you vote
FOR
all 12 director nominees and
FOR
Proposal 2.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
To elect 12 directors nominated by the board
of directors to serve until the 2018 annual meeting of
shareowners.
|
|
|
|
|
|
|
|
|
|
Nominees:
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1a)
|
|
David P. Abney
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1b)
|
|
Rodney C. Adkins
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1c)
|
|
Michael J. Burns
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1d)
|
|
William R. Johnson
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1e)
|
|
Candace Kendle
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1f)
|
|
Ann M. Livermore
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1g)
|
|
Rudy H.P. Markham
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1h)
|
|
Franck J. Moison
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1i)
|
|
Clark T. Randt, Jr.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1j)
|
|
John T. Stankey
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1k)
|
|
Carol B. Tomé
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1l)
|
|
Kevin M. Warsh
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature [PLEASE SIGN WITHIN BOX]
|
Date
|
PLEASE "X" HERE ONLY IF YOU PLAN TO ATTEND THE MEETING AND VOTE
THESE SHARES IN PERSON
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
For
|
|
Against
|
|
Abstain
|
2.
|
|
To approve the advisory resolution on
executive compensation.
|
|
☐
|
|
☐
|
|
☐
|
|
The board of directors recommends you vote
FOR
three years
(triennial).
|
|
1 Year
|
|
2 Years
|
|
3 Years
|
|
Abstain
|
|
3.
|
|
To approve the advisory vote on the frequency of future advisory
votes on executive compensation.
|
|
☐
|
|
☐
|
|
☐
|
|
☐
|
|
The board of directors recommends you vote
FOR
Proposal
4.
|
|
For
|
|
Against
|
|
Abstain
|
|
4.
|
|
To ratify the appointment of Deloitte &
Touche LLP as UPS's independent registered public accounting firm for the
year ending December 31, 2017.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
The board of directors recommends you vote
AGAINST
the
following shareowner proposal:
|
|
|
|
|
|
|
|
5.
|
|
To prepare an annual report on lobbying
activities.
|
|
☐
|
|
☐
|
|
☐
|
|
The board of directors recommends you vote
AGAINST
the
following shareowner proposal:
|
|
|
|
|
|
|
|
6.
|
|
To reduce the voting power of class A stock
from 10 votes per share to one vote per share.
|
|
☐
|
|
☐
|
|
☐
|
|
The board of directors recommends you vote
AGAINST
the
following shareowner proposal:
|
|
|
|
|
|
|
|
7.
|
|
To adopt Holy Land Principles.
|
|
|
|
☐
|
|
☐
|
|
☐
|
|
In their discretion upon such other matters as may properly come
before the meeting or any adjournments or postponements thereof.
|
|
|
|
|
|
|
Table of
Contents
UNITED PARCEL
SERVICE, INC.
INVESTOR RELATIONS B1F7
55 GLENLAKE PARKWAY,
N.E.
ATLANTA, GA 30328
VOTE BY INTERNET -
www.proxyvote.com
or scan the QR Barcode above
Use the Internet to transmit your voting
instructions and for electronic delivery of information up until 11:59 P.M.
Eastern Time on May 3, 2017. Have your proxy card in hand when you access the
web site and follow the instructions to obtain your records and to create an
electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up
until 11:59 P.M. Eastern Time on May 3, 2017. Have your proxy card in hand when
you call and then follow the instructions.
VOTE BY MAIL
Mark, sign
and date your proxy card and return it in the postage-paid envelope we have
provided or return it to United Parcel Service, Inc. c/o Broadridge, 51 Mercedes
Way, Edgewood, NY 11717.
ELECTRONIC DELIVERY OF FUTURE SHAREOWNER
COMMUNICATIONS
If you would
like to reduce the costs incurred by United Parcel Service, Inc. in mailing
proxy materials, you can consent to receiving all future proxy statements, proxy
cards and annual reports electronically via e-mail or the Internet. To sign up
for electronic delivery, please follow the instructions above to vote using the
Internet and, when prompted, indicate that you agree to receive or access
shareowner communications electronically in future years.
If you vote by Internet or phone, you do not need to return this
card.
TO VOTE,
MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
|
E18496-P88265-Z69543
|
KEEP THIS PORTION FOR YOUR
RECORDS
|
DETACH AND RETURN THIS PORTION ONLY
|
THIS PROXY CARD IS VALID ONLY WHEN SIGNED
AND DATED.
|
UNITED PARCEL
SERVICE, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The board of
directors recommends you vote
FOR
all 12 director nominees and
FOR
Proposal 2.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
To elect 12 directors nominated by the board
of directors to serve until the 2018 annual meeting of
shareowners.
|
|
|
|
|
|
|
|
|
Nominees:
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
1a)
|
|
David P.
Abney
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1b)
|
|
Rodney C.
Adkins
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1c)
|
|
Michael J.
Burns
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1d)
|
|
William R.
Johnson
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1e)
|
|
Candace
Kendle
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1f)
|
|
Ann M.
Livermore
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1g)
|
|
Rudy H.P.
Markham
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1h)
|
|
Franck J.
Moison
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1i)
|
|
Clark T.
Randt, Jr.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1j)
|
|
John T.
Stankey
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1k)
|
|
Carol B.
Tomé
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1l)
|
|
Kevin M.
Warsh
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
Please indicate if you plan to attend this meeting.
|
|
☐
Yes
|
|
☐
No
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
Against
|
|
Abstain
|
2.
|
|
To approve the advisory resolution on
executive compensation.
|
|
☐
|
|
☐
|
|
☐
|
|
The board of directors recommends you vote
FOR
three years
(triennial).
|
|
1 Year
|
|
2 Years
|
|
3 Years
|
|
Abstain
|
|
3.
|
|
To approve the advisory vote on the frequency of future advisory
votes on executive compensation.
|
|
☐
|
|
☐
|
|
☐
|
|
☐
|
|
The board of directors recommends you vote
FOR
Proposal
4.
|
|
For
|
|
Against
|
|
Abstain
|
|
4.
|
|
To ratify the appointment of Deloitte &
Touche LLP as UPS's independent registered public accounting firm for the
year ending December 31, 2017.
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
The board of directors recommends you vote
AGAINST
the
following shareowner proposal:
|
|
|
|
|
|
|
|
5.
|
|
To prepare an annual report on lobbying
activities.
|
|
☐
|
|
☐
|
|
☐
|
|
The board of directors recommends you vote
AGAINST
the
following shareowner proposal:
|
|
|
|
|
|
|
|
6.
|
|
To reduce the voting power of class A stock
from 10 votes per share to one vote per share.
|
|
☐
|
|
☐
|
|
☐
|
|
The board of directors recommends you vote
AGAINST
the
following shareowner proposal:
|
|
|
|
|
|
|
|
7.
|
|
To adopt Holy Land Principles.
|
|
|
|
☐
|
|
☐
|
|
☐
|
|
In their discretion upon such other matters as may properly come
before the meeting or any adjournments or postponements thereof.
|
|
|
|
|
|
|
Please sign
exactly as your name(s) appear(s) hereon. When signing as attorney,
executor, administrator, or other fiduciary, please give full title as
such. Joint owners should each sign personally. All holders must sign. If
a corporation or partnership, please sign in full corporate or partnership
name by authorized officer.
|
|
|
|
Signature
[PLEASE SIGN WITHIN BOX]
|
Date
|
|
|
|
|
Signature
(Joint Owners)
|
Date
|
|
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