Fred W. Smith

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“If you keep working at it, in the last analysis, you win. They’ve got to kill us a hundred times. All we have to do is kill them once.”

FedEx

Frederick Wallace “Fred” Smith (born August 11, 1944), is the founder, chairman, president, and CEO of FedEx, originally known as Federal Express, the first overnight express delivery company in the world, and the largest in the world.[citation needed] The company is headquartered in Memphis, Tennessee.

Early years

Smith was born in Marks, Mississippi, the son of James Frederick Smith—who (before age 20) dropped his first name, expressing a preference to be known as Fred or Frederick—the founder of the Toddle Houserestaurant chain and the Smith Motor Coach Company (renamed the Dixie Greyhound Lines after The Greyhound Corporation bought a controlling interest in 1931).[3][4] Fred Smith, the father, died while Fred Smith, the son, was only 4, and the boy was raised by his mother and uncles.[5]

Smith was crippled by bone disease as a small boy but regained his health by age 10, before becoming an excellent football player and learning to fly at 15.[6]

Smith had a great interest in flying, and became an amateur pilot as a teen. He attended elementary school at Presbyterian Day School and high school at Memphis University School.

In 1962, Smith entered Yale University. While attending Yale, he wrote a paper for an economics class, outlining overnight delivery service in a computer information age. Folklore suggests that he received a C for this paper, although in a later interview he claims that he told a reporter, “I don’t know what grade, probably made my usual C,” while other tales suggest that his professor told him that, in order for him to get a C, the idea had to be feasible. The paper became the idea of FedEx (for years, the sample package displayed in the company’s print advertisements featured a return address at Yale). Smith became a member and eventually the president of the Delta Kappa Epsilon (DKE) fraternity and the Skull and Bones secret society.[7][8] He received his bachelor’s degree in economics in 1966. In his college years, he was a friend and DKE fraternity brother ofGeorge W. Bush.[9] Smith was also friends with John Kerry and shared an enthusiasm for aviation with Kerry[10] and was a flying partner with him.

Marine Corps service

After graduation, Smith was commissioned in the U.S. Marine Corps, serving for three years (from 1966 to 1969) as a platoon leader and a forward air controller (FAC), flying in the back seat of the OV-10. Much mythology exists about this part of his life; Smith was a Marine Corps “Ground Officer” for his entire service. He was specially trained to fly with pilots and observe and ‘control’ ground action. He never went through Navy flight training and was not a “Naval aviator” or “pilot” in the military. Individuals who completed Navy flight training and became a “Designated Naval Aviator” (pilot) were obligated to serve six years at the time.

As a Marine, Smith had the opportunity to observe the military’s logistics system first hand. He served two tours of duty in Vietnam, flying with pilots on over 200 combat missions. He was honorably discharged in 1969 with the rank of Captain, having received theSilver Star, the Bronze Star, and two Purple Hearts. While in the military, Smith carefully observed the procurement and delivery procedures, fine-tuning his dream for an overnight delivery service.[5]

Business career

In 1970, Smith purchased the controlling interest in an aircraft maintenance company, Ark Aviation Sales,[5] and by 1971 turned its focus to trading used jets. On June 18, 1971, Smith founded Federal Express with his $4 million inheritance (approximately $23 million in 2013 dollars),[11] and raised $91 million (approximately $525 million in 2013 dollars)[11] in venture capital. In 1973, the company began offering service to 25 cities, and it began with small packages and documents and a fleet of 14 Falcon 20 (DA-20) jets. His focus was on developing an integrated air-ground system, which had never been done before. Smith developed FedEx on the business idea of a shipment version of a bank clearing house where one bank clearing house was located in the middle of the representative banks and all their representatives would be sent to the central location to exchange materials.[5]

In the early days of FedEx, Smith had to go to great lengths to keep the company afloat. In one instance, he took the company’s last $5,000 to Las Vegas and won $27,000 gambling on blackjack to cover the company’s $24,000 fuel bill.[12]

Smith has served on the boards of several large public companies, the St. Jude Children’s Research Hospital and Mayo Foundation boards. He was formerly chairman of the Board of Governors for the International Air Transport Association and the U.S. Air Transport Association. Smith is chair of the Business Roundtable’s Security Task Force, and a member of the Business Council and the Cato Institute. He served as chairman of the U.S.-China Business Council and is the current chairman of the French-American Business Council. In addition, Smith was named 2006 Person of the Year by the French-American Chamber of Commerce. He is a member of the Aviation Hall of Fame. Smith was approached by Senator Bob Dole, who asked Smith for support in opening corporate doors for a new World War II memorial.[13] Smith was appointed to co-chairman of the U.S. World War II Memorial Project. Smith was named as Chief Executive magazine’s 2004 “CEO of the Year”.

In addition to FedEx, Smith is also a co-owner of the Washington Redskins NFL Team. His son, Arthur Smith, who played football at the University of North Carolina, is an Offensive Line/Tight End Assistant Coach for the Tennessee Titans. This partnership resulted in FedEx sponsorship of the Joe Gibbs NASCAR racing team. Smith also owns or co-owns several entertainment companies, including Dream Image Productions and Alcon Films (producers of the Warner Bros. film Insomnia starring Al Pacino and Robin Williams).

In 2000, Smith made an appearance as himself in the Tom Hanks movie Cast Away, when Tom’s character is welcomed back, which was filmed on location at FedEx’s home facilities in Memphis, Tennessee.

A DKE Fraternity Brother of George W. Bush while at Yale, after Bush’s 2000 election, there was some speculation that Smith might be appointed to the Bush Cabinet as Defense Secretary.[14] While Smith was Bush’s first choice for the position, he declined for medical reasons — Donald Rumsfeld was named instead.[15] Although Smith was friends with both 2004 major candidates, John Kerry and George W. Bush, Smith chose to endorse Bush’s re-election in 2004. When Bush decided to replace Rumsfeld, Smith was offered the position again, but he declined in order to spend time with his terminally ill daughter.[16]

Smith was a supporter of Senator John McCain‘s 2008 Presidential bid, and had been named McCain’s National Co-Chairman of his campaign committee. Some had speculated that Smith might have a role as an economic advisor in a theoretical McCain administration.

Smith was inducted into the Junior Achievement U.S. Business Hall of Fame in 1998. His other awards include “CEO of the Year 2004” by Chief Executive Magazine[17] and the 2008 Kellogg Award for Distinguished Leadership, presented by the Kellogg School of Management on May 29, 2008.[18] He was also awarded the 2008 Bower Award for Business Leadership from The Franklin Institute in Philadelphia, Pennsylvania.[19] He is the 2011 recipient of the Tony Jannus Award for distinguished contributions to commercial aviation.[20]

While CEO of FedEx in 2008, Frederick W. Smith earned a total compensation of $10,434,589, which included a base salary of $1,430,466, a cash bonus of $2,705,000, stocks granted of $0, and options granted of $5,461,575.[21] In June 2009, Smith expressed interest in purchasing the controlling share (60%) of the St. Louis Rams from Chip Rosenbloom and Lucia Rodriguez.[22] In 2009, Frederick W. Smith earned a total compensation of $7,740,658, which included a base salary of $1,355,028, a cash bonus of $0, stocks granted of $0, options granted of $5,079,191, and other compensation totaling $1,306,439.[23]

In March 2014, Fortune Magazine ranked him 26th among the list of “World’s 50 Greatest Leaders”[24]



 

This profile is partly adapted from a Wikipedia entry on Fred Smith, available under the Creative Commons Attribution-ShareAlike License.

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