UPS Inc. (NYSE: UPS) announced on March 12 that its board of directors has selected current board member and Chairperson of the Audit Committee Carol Tomé to lead the company. Tomé will replace current Chairman and CEO David Abney in the role effective June 1.
“After a rigorous selection process involving both internal and external candidates, Carol was the clear choice,” said UPS Lead Independent Director William Johnson. Johnson, who also serves as Chair of the UPS Nominating and Corporate Governance Committee and is a member of the executive committee, will assume the Non-Executive Chairman role on September 30.
Tomé has been a UPS board member since 2003. She served as CFO of The Home Depot Inc. (NYSE: HD), which experienced a 450% increase in shareholder value during her 18 years in the role. Tomé will be the 12th CEO at UPS since its founding 113 years ago.
“Carol is one of the most respected and talented leaders in corporate America and has a proven track record of driving growth at a global organization, maximizing shareholder value, developing talent and successfully executing against strategic priorities,” said Johnson.
“I look forward to working with and further developing the talented management team and the company’s 495,000 employees to deliver for our customers and shareowners,” said Tomé.
Tomé’s reputation was lauded by equity analysts as well.
“As HD’s CFO for 18 years through August 2019, Ms. Tomé was held in very high esteem by investors with an expertise for financial management, strategy and supply chain. She shepherded HD through navigating choppy ecommerce waters and competing with online giants, an experience that will be extremely handy at the helm of UPS,” said Morgan Stanley equity analyst Ravi Shanker.
Shanker sees the move as capping “the churn in the c-suite,” which included the announced retirements of the company’s CFO in August 2019 and COO in October 2019.
In a note to clients, Shanker acknowledged many headwinds for the new UPS leadership team.
“There are no easy answers to the challenges facing UPS, in our view. In addition to navigating the COVID situation, the new management team will have to solve the problem of overexposure to Amazon in the near-term and figure out how to sustainably make adequate returns in ecommerce over time, despite the cost of serving customers rising and the price paid by customers falling (the negative flywheel effect),” stated Shanker.
Abney’s tenure at UPS
Abney will remain in the CEO role until June 1, at which time he will become Executive Chairman of the Board. Abney will retire from the board on September 30, staying on through the end of 2020 as a “special consultant.”
“UPS has been one of my life’s passions and through UPS I have been able to live the American dream. I am proud to have worked with UPSers to prepare this great company for its next 100 years. I am confident in the UPS management team and their capabilities to execute our strategies in the future,” said Abney. “This is the right time for me to pass the baton. I am extremely pleased for Carol and know she is the best choice to lead the company. She understands UPS’s culture and values, is a strategic leader and possesses a customer-first mindset.”
Abney was named CEO in 2014, later assuming the role of Chairman in 2016. He’s credited with growing revenue by 27% and adjusted net income by nearly 50% during his leadership. On his watch, the company returned $29 billion in cash to shareholders through dividends and share repurchases.
Abney is also credited with significant global expansion of the UPS network, receiving the “FAA’s first full approval” to operate drones as an airline and reaching 32 million package deliveries a day during the 2019 peak season.
Abney rose through the ranks, starting as a package handler while attending college at Delta State University in 1974. He grew the company’s global logistics network as President of UPS International and was named Chief Operating Officer in 2007.
Upon retirement, Abney will have completed 46 years of service with UPS.
“We congratulate David on a truly exceptional career at UPS. He has undertaken bold actions to place UPS at the forefront of the transportation industry and position its global network and people to capitalize on emerging trends that will carry the company well into the future,” said Johnson.