XPO Logistics' CEO Bradley Jacobs is poised to reap a potential $110 million money grab while the company's employees have to deal with lousy health insurance and no retirement security.
At a special meeting set for today in Greenwich, Conn., the company's board of directors will ask shareholders to approve a proposal that could reward Jacobs, who is already XPO's largest shareholder, with a windfall stock bonus worth $110 million at current stock price levels. It will result in an increase five times greater than any such previous awards doled out before by XPO. Other top executives could also receive outsized benefits, and these stock prizes could be given out year after year. This is exactly the type of greed that Americans abhor, yet another example of the out-of-control income inequality that is harming millions of lives across this country.
The Board action coincides with key developments:
• In Los Angeles, also on December 20, there is a meeting involving four XPO Cartage drivers working at the twin ports of Los Angeles and Long Beach who filed wage and hour claims totaling more than $1.2 million with the California Division of Labor Standards Enforcement. At the LA-area hearing, they will be seeking damages for unlawful deductions, unreimbursed expenses and unpaid meal and rest break premiums;
• About 19,000 drivers at the former Con-way, Inc., which XPO bought in 2015 for $3 billion, continue to see their health care costs rise while coverage plummets. The workers also lost their pensions and have to now work with no retirement security; and
• Jacobs visited XPO warehouse workers in North Haven, Conn. three times, including the day before the workers chose to join the Teamsters. Jacobs arrived in a chauffeur-driven limousine and told the workers, who make about $12 an hour, that they don't need a union. The workers voted overwhelmingly to form their union.
These events expose the yawning divide in respect XPO holds when it comes to those at the top of the corporate ladder and those who actually do the work that make this multinational company successful. It's a view worthy of Scrooge himself. And it is why the Teamsters and other unions are standing up to fight against this greed.
Earlier this month, I joined 45 leaders of 15 labor unions in Europe that represent workers at XPO in nine countries, and we all agreed to condemn this executive stock windfall plan. Meeting during the International Transport Workers' Federation's week-long conference in Brussels, we all agreed that workers were being overlooked at the expense of Jacobs and his clubby Board of Directors.
Even before the meeting, however, the Teamsters had been vocal in our opposition to the stock bonus proposal. In a letter sent to XPO Lead Independent Director Michael Jesselson on Dec. 1, Teamsters General Secretary-Treasurer Ken Hall noted that the plan as proposed could allow the board to award Jacobs compensation that is 160 times his base salary.
"Under no conceivable scenario is a potential payout of 2.5 million shares to CEO Jacobs, the company's largest shareholder, justifiable," Hall said. "The board has lost sight of one of its prime responsibilities -- establishing sound executive pay practices that incentivize performance and protect the interests of shareholders."
Meanwhile, many XPO workers have been fighting for their right to join a union, despite corporate resistance. Just last week, the U.S. Court of Appeals for the Fifth Circuit sided with workers in Laredo, Texas who chose to organize with Teamsters Local 657, telling the company they must recognize the union as the workers' bargaining representative.
It was just the latest example of XPO employees standing up for better benefits. Last month, company drivers in King of Prussia, Pa. aligned with the union. And back in October, XPO drivers in Aurora, Ill. and warehouse workers in North Haven, Conn. voted to join the Teamsters in an effort to improve their standard of living.
Workers are demanding changes because they know the company is not treating them right. And tomorrow's vote perfectly encapsulates that argument. For while XPO cries poor-mouth to those on the job, Jacobs and his board are ready and willing to dole out excessive stock rewards.
The Teamsters want XPO and Bradley Jacobs to know that its employees aren't backing down, this union isn't backing down and unions all over the globe aren't backing down either. It's time to stop this big business mindset that rewards those with the most at the expense of those struggling to support their families. In this season of giving, XPO and Bradley Jacobs seem to be doing the opposite.