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Frederick W. Smith

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For the surgeon in Syracuse, New York, see Frederick W. Smith (physician). For other people with similar names, see Frederick Smith.
Frederick W. Smith
Smith in 2013
Born
Frederick Wallace Smith

(1944-08-11) August 11, 1944 (age 80)
Marks, Mississippi, U.S.
EducationYale University (BA)
Occupations
  • Business magnate
  • investor
  • philanthropist
Years active1971–present
Known forFounder of FedEx Corporation
Political partyRepublican
Spouses
Linda Black Grisham
​
​
(m. 1969; div. 1977)​
Diane Smith
​
​
(m. 2006)​
ChildrenRichard Smith
Arthur Smith
Cannon Smith
Windland Smith Rice
Molly Smith
Parent(s)James F. Smith
Sally Wallace
Military career
AllegianceUnited States
Service / branchUnited States Marine Corps
RankCaptain
Battles / warsVietnam War (WIA)
AwardsSilver Star
Bronze Star
Purple Heart (2)

Frederick Wallace Smith (born August 11, 1944) is an American business magnate and investor. He is the founder and chairman of FedEx Corporation, the world's largest transportation company. Smith stepped down as CEO in June 2022 and was succeeded by Raj Subramaniam.[1] He is considered one of the most successful transportation entrepreneurs in the world. He had an estimated net worth of $6.3 billion as of June 2024.[2]

Early life

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Frederick Smith was born in Marks, Mississippi, the son of James Frederick "Fred" Smith, the founder of the Toddle House restaurant chain and the Smith Motor Coach Company (renamed the Dixie Greyhound Lines after The Greyhound Corporation bought a controlling interest in 1931).[3] The elder Smith died when his son was only 4, and the boy was raised by his mother and uncles.[4]

Smith was crippled by bone disease as a small boy but regained his health by age 10.[5]

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

In 1962, Smith entered Yale University for pursuing economics.[6] According to some sources,[7] he wrote a paper for an economics class, outlining overnight delivery service, on which he received a “C”. In fact, in an interview, he said he doesn't remember the grade. [8][9]

Additionally, Smith became a member and eventually the president of the Delta Kappa Epsilon (DKE) fraternity and the Skull and Bones secret society.[10][11] He received his bachelor's degree in economics in 1966. In his college years, he was a friend and DKE fraternity brother of future U.S. president George W. Bush.[12] Smith was also friends with future U.S. Senator and Secretary of State John Kerry; the two shared an enthusiasm for aviation and were flying partners.[13]

Marine Corps service

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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) in South Vietnam, flying in the back seat of the OV-10.

He served two tours of duty in the Vietnam War, and was honorably discharged in 1969 with the rank of captain, having received the Silver Star, the Bronze Star, and two Purple Hearts.[14]

His Silver Star citation reads:

The President of the United States of America takes pleasure in presenting the Silver Star to First Lieutenant Frederick Wallace Smith, United States Marine Corps, for conspicuous gallantry and intrepidity in action while serving as Commanding Officer of Company K, 3rd Battalion, 5th Marines, 1st Marine Division in connection with operations against the enemy in the Republic of Vietnam. On the morning of 27 May 1968, while conducting a search and destroy operation, Company K became heavily engaged with a North Vietnamese Army battalion occupying well-entrenched emplacements on Goi Noi Island in Quang Nam Province. As Lieutenant Smith led his men in an aggressive assault upon the enemy positions, the North Vietnamese force launched a determined counterattack, supported by mortars, on the Marines' left flank. Unhesitatingly rushing through the intense hostile fire to the position of heaviest contact, Lieutenant Smith fearlessly removed several casualties from the hazardous area and, shouting words of encouragement to his men, directed their fire upon the advancing enemy soldiers, successfully repulsing the hostile attack. Moving boldly across the fire-swept terrain to an elevated area, he calmly disregarded repeated North Vietnamese attempts to direct upon him as he skillfully adjusted artillery fire and air strikes upon the hostile positions to within fifty meters of his own location and continued to direct the movement of his unit. Accurately assessing the confusion that supporting arms was causing among the enemy soldiers, he raced across the fire-swept terrain to the right flank of his company and led an enveloping attack on the hostile unit's weakest point, routing the North Vietnamese unit and inflicting numerous casualties. His aggressive tactics and calm presence of min [sic] under fire inspired all who observed him and were instrumental in his unit accounting for the capture of two hostile soldiers as well as numerous documents and valuable items of equipment. By his courage, aggressive leadership and unfaltering devotion to duty at great personal risk, Lieutenant Smith upheld the highest traditions of the Marine Corps and of the United States Naval Service."[15]

Business career

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In 1970, Smith purchased the controlling interest in an aircraft maintenance company, Ark Aviation Sales,[4] and by 1971 turned its focus to trading used jets. On June 18, 1971, Smith founded Federal Express with his $4 million inheritance (approximately $29.8 million in 2023 dollars)[16] and raised $91 million (approximately $690 million in 2023 dollars)[16] in venture capital. In 1973, the company began offering service to 25 cities, shipping small packages and documents in a fleet of 14 Dassault Falcon 20 (DA-20) jets. His focus was on developing an integrated air-ground system. 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.[4]

In the early days of FedEx, Smith had to go to great lengths to keep the company afloat. In one instance, after a crucial business loan was denied, 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. It kept FedEx alive for one more week.[17]

In 2003 Smith, along with Robert Rothman and Dwight Schar, purchased a minority share of the Washington Commanders, an American football franchise belonging to the National Football League. The three owned a total of 40% of the team until 2021, when they sold their stake to majority owner Dan Snyder following discontentment with Snyder.[18][19] Smith also owns or co-owns several other entertainment companies, such as Alcon Entertainment.

In 2000, Smith made an appearance as himself in the Tom Hanks movie Cast Away, when Hanks's character is welcomed back, which was filmed on location at FedEx's home facilities in Memphis, Tennessee. As a DKE fraternity brother of George W. Bush while at Yale, there was some speculation after Bush's 2000 election that Smith might be appointed to the Bush Cabinet as Defense Secretary.[20] While Smith was Bush's first choice for the position, he declined for medical reasons — Donald Rumsfeld was named instead.[21] 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.[22]

Smith was a supporter of Senator John McCain's 2008 Presidential bid, and was named national co-chairman of his campaign committee.

Smith was inducted into the Junior Achievement U.S. Business Hall of Fame and also awarded the Golden Plate Award of the American Academy of Achievement in 1998.[23] He was inducted into the SMEI Sales & Marketing Hall of Fame in 2000. His other awards include "CEO of the Year 2004" by Chief Executive Magazine[24] and the 2008 Kellogg Award for Distinguished Leadership, presented by the Kellogg School of Management on May 29, 2008.[25] He was also awarded the 2008 Bower Award for Business Leadership from The Franklin Institute in Philadelphia, Pennsylvania.[26] He is the 2011 recipient of the Tony Jannus Award for distinguished contributions to commercial aviation.[27]

While CEO of FedEx in 2008, 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.[28] In June 2009, Smith expressed interest in purchasing the controlling share (60%) of the St. Louis Rams from Chip Rosenbloom and Lucia Rodriguez.[29] In 2009, 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.[30]

In March 2014, Fortune Magazine ranked him 26th among the list of the "World's 50 Greatest Leaders".[31]

In March 2022, Smith announced that he would step down as CEO and become executive chairman. He named long-time FedEx executive Raj Subramaniam as his successor.[1][32]

Forgery indictment and car crash

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On January 31, 1975, Fred Smith was indicted for forgery by a federal grand jury. The suit was filed by Smith's two half-sisters. The lawsuit alleged Smith had forged documents to obtain a $2 million bank loan and he and executives of his family's trust fund had sold stock from the fund for a loss of $14 million. A warrant for Smith's arrest was issued for which Smith posted bond with federal authorities in Memphis.[33] Smith was later found not guilty on the forgery charge.

The same evening of his forgery indictment Smith was involved in a fatal hit and run in which he killed a 54-year-old handyman named George C. Sturghill. Smith was arrested and charged with leaving the scene of a crash and driving with an expired license. He was released on a $250 bond. All charges were later dismissed.[33]

This was not the first time Smith was involved in a fatal car crash. During his first summer break from Yale, Smith was back in Memphis driving out to a lake with friends when he lost control of the car he was driving, causing the vehicle to flip and killing the passenger in the front seat. The cause of the crash was never determined.[34]

Personal life

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Smith has ten children, including photographer Windland Smith Rice, film producer Molly Smith and former Atlanta Falcons head coach and current Pittsburgh Steelers offensive coordinator Arthur Smith.[35] His eldest son, Richard W. Smith, is a high level executive at FedEx.[36]

Notes

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  1. ^ a b "FedEx names Raj Subramaniam as CEO, replacing founder Fred Smith". CNBC. 2022-03-28. Retrieved 2022-03-29.
  2. ^ "Fred Smith". Forbes. Retrieved 2023-11-06.
  3. ^ "Fred Smith 1944". Business Biographies. Retrieved September 23, 2021.
  4. ^ a b c "Frederick W. Smith Biography and Interview". www.achievement.org. American Academy of Achievement.
  5. ^ Brown, Abram. "10 Things You Might Not Know About FedEx Billionaire Fred Smith". Forbes.
  6. ^ Joshy, Jinto. "Fred Smith". Forbes. Retrieved 2023-06-27.
  7. ^ Strauss, Valerie (August 8, 2018). "Trump tells story of term paper that got a 'C' but launched FedEx. But what grade should his story get?". The Washington Post. Retrieved October 27, 2021.
  8. ^ Mikkelson, Barbara (2009-05-28). "The Origins of FedEx". Snopes. Retrieved 2023-09-28.
  9. ^ "FedEx CEO Fred Smith on … everything". Fortune. Retrieved 2023-09-28.
  10. ^ Robbins, Alexandra (2002). Secrets of the Tomb: Skull and Bones, the Ivy League, and the Hidden Paths of Power. Little, Brown and Company. pp. 172, 180–1. ISBN 0-316-72091-7.
  11. ^ "Frederick W. Smith." Contemporary Newsmakers 1985, Issue Cumulation. Gale Research, 1986.
  12. ^ "'Live' with TAE: Frederick Smith". The American Enterprise. June 1, 2004.
  13. ^ Purdum, Todd S. (July 6, 2004). "The 2004 Campaign: The Massachusetts Senator: Idealistic Man on Campus To Realistic Sailor at War". New York Times.
  14. ^ Vergun, David (March 4, 2014). "Vietnam experience inspires veteran to create overnight delivery company". www.army.mil. United States Army. Retrieved August 20, 2023.
  15. ^ "Frederick Smith - Recipient - Military Times Hall Of Valor". valor.militarytimes.com.
  16. ^ a b "The Federal Reserve Bank of Minneapolis".
  17. ^ Bradford, Harry (October 15, 2012). "FedEx's $5,000 Gamble. Literally". Huffington Post.
  18. ^ Clarke, Liz; Maske, Mark; Carpenter, Les. "Redskins' minority owners look to sell stakes in team amid ongoing turmoil". Washington Post. Archived from the original on August 9, 2020. Retrieved August 9, 2020.
  19. ^ Dajani, Jordan (3 April 2021). "Washington Football Team owner Dan Snyder officially buys out partners, per report". CBS Sports. Archived from the original on April 3, 2021. Retrieved April 3, 2021.
  20. ^ "Bush Takes Break Amid Transitions". Inside Politics. CNN. December 26, 2000. Archived from the original on 2020-07-31. Retrieved 2007-01-27.
  21. ^ Bush, George W. (2010). Decision Points. Crown. pp. 83–84. ISBN 978-0-307-59061-9.
  22. ^ Bush, George W. (2010). Decision Points. Crown. p. 91. ISBN 978-0-307-59061-9.
  23. ^ "Golden Plate Awardees of the American Academy of Achievement". www.achievement.org. American Academy of Achievement.
  24. ^ William J. Holstein (July 1, 2004). "CEO OF THE YEAR 2004". Archived from the original on November 19, 2012.
  25. ^ Henretty, Aubrey (May 30, 2008). "Kellogg honors FedEx CEO Fred Smith as Distinguished Leader". Kellogg School of Management, Northwestern University. Archived from the original on 2008-06-02. Retrieved 2008-05-30.
  26. ^ "2008 Bower Award for Business Leadership: Frederick W. Smith". The Franklin Institute Awards. The Franklin Institute. Archived from the original on December 24, 2008. Retrieved February 1, 2009.
  27. ^ Huettel, Steve (April 14, 2011). "FedEx CEO wins Tony Jannus Award". St. Petersburg Times. Archived from the original on 2011-04-16. Retrieved 2011-04-14.
  28. ^ 2008 CEO Compensation for Frederick W. Smith Archived 2009-04-14 at the Wayback Machine, Equilar.com
  29. ^ Tritto, Christopher (June 21, 2009). "FedEx's Smith could deliver bid for Rams".
  30. ^ 2009 CEO Compensation for Frederick W. Smith Archived 2009-04-14 at the Wayback Machine, Equilar.com
  31. ^ "Fred Smith - Fortune ranks the World's 50 Greatest Leaders - FORTUNE". Archived from the original on 2014-03-27. Retrieved 2014-03-27. The World's 50 Greatest Leaders
  32. ^ Watts, Micaela A. (March 28, 2022). "FedEx founder Fred Smith to step down as CEO; Raj Subramaniam to succeed him". The Commercial Appeal. Retrieved 1 April 2022.
  33. ^ a b "Jury Indicts Freight Flyer In Bank Loan". The Commercial Appeal, Little Rock Bureau. February 4, 1975. p. 1.
  34. ^ Reichert, Bernhard. "A Review of OVERNIGHT SUCCESS: FEDERAL EXPRESS AND ITS RENEGADE CREATOR". Journal of Business Leadership: 39.
  35. ^ "Rachel Smith follows sister's footsteps as movie producer".
  36. ^ Richard W. Smith fedex.com

References

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