The annual bonus FedEx nixed for higher-up employees this past financial year is not expected to return for 2020, the Memphis logistics giant said Tuesday.

“Given the current challenging business environment, we unfortunately do not expect the level of operating income in FY20 to be enough to fund an Annual Incentive Compensation payout at the end of the fiscal year,” FedEx said in a statement.

Payouts from FedEx’s annual incentive compensation plan are determined by company objectives and calculated as a percentage of base salary.

The 2020 AIC target payout for founder and CEO Fred Smith is 165% of his base salary, per FedEx’s annual proxy statement. A handful of other top executives have a 120% target payout.

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But the program reaches beyond top brass at FedEx as it “generally provides an annual cash bonus opportunity to many of our salaried employees on an enterprise-wide basis,” the company said in the proxy statement.

The payout is based on achieving financial objectives, which apply equally to all participants, and individual objectives, it said.

“The primary objective of our AIC program is to motivate our people to achieve our annual financial goals and other business objectives and reward them accordingly,” FedEx said.

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FedEx has struggled over the past year, blaming a slowing global economy for battering its largest company, FedEx Express. The company has rolled out several cost-cutting initiatives, including employee buyouts, to cushion the blows.

In June, FedEx revealed no company officers or staff directors would receive a 2019 AIC payout due to “challenging business conditions.” FedEx’s board of directors removed executives from the plan after recommendation from its compensation committee.

FedEx also said Tuesday it has implemented a 2% cost-of-living salary increase in the U.S. across most of its employee groups and operating companies, but didn't disclose further details.

Max Garland covers FedEx, logistics and health care for The Commercial Appeal. Reach him at max.garland@commercialappeal.com or 901-529-2651 and on Twitter @MaxGarlandTypes.