Fifty years after he founded the company, Frederick Smith announced on Monday that he will step down as FedEx’s chief executive in June.
Raj Subramaniam, the current president and chief operating officer, will succeed Mr. Smith, according to a news release from FedEx.
“FedEx has changed the world by connecting people and possibilities for the last 50 years,” Mr. Smith, 77, said in a statement on the company’s website. “As we look toward what’s next, I have a great sense of satisfaction.”
A former Marine officer who served two tours of duty in Vietnam, Mr. Smith came up with the idea for FedEx from a term paper he wrote in 1965 while he was an undergraduate at Yale University. The paper, which explained how companies could deliver items faster if they changed their shipping strategies, was given a C grade because Mr. Smith’s professor didn’t think the strategy was viable, according to Entrepreneur magazine.
In its first 26 months of business, the company lost $29 million. Mr. Smith has recounted how he was able to keep the company afloat with money he won by gambling in Las Vegas. In one story told in a memoir by a former FedEx executive, Robert Frock, Mr. Smith took the company’s last $5,000 to Vegas and brought back winnings of $27,000 — money that allowed FedEx to pay a fuel bill and keep the company afloat.
During his decades leading the company, Mr. Smith expanded FedEx into a billion-dollar business that revolutionized the air transport business. According to FedEx, the company operated 695 aircraft across 220 countries in 2022 and moves about 17 million packages per day. For the three months that ended in February, it reported profit of more than $1 billion on $23.6 billion of revenue.
Mr. Smith was an early advocate of the 2017 tax cuts advanced by President Donald J. Trump. The tax cuts allowed FedEx to avoid more than $1.5 billion in taxes, according to a November 2019 article in The New York Times. After the publication of the article, Mr. Smith challenged the publisher and the business editor of The Times to a debate. The debate did not occur, and Mr. Smith did not point to factual errors in The Times’s coverage.