(Mike Blake/Reuters)

You may have seen (or heard on a podcast) that Fred Smith so vehemently objects to the New York Times report contending that FedEx paid nothing in federal taxes that he’s challenged New York Times publisher A. G. Sulzberger to a public debate and pointed out that “the New York Times paid zero federal income tax in 2017 on earnings of $111 million, and only $30 million in 2018 – 18% of their pretax book income.”

Notice the Times article implicitly argues that company revenue going to shareholders is inherently something bad or unjust:

Much of its [tax cut] savings have gone to reward shareholders: FedEx spent more than $2 billion on stock buybacks and dividend increases in the 2019 fiscal year, up from $1.6 billion in 2018, and more than double the amount the company spent on buybacks and dividends in fiscal year 2017.

FedEx had $70 billion in revenue last year.

But who are those shareholders who are getting money they seemingly don’t deserve?

The single-biggest shareholder in FedEx is Dodge and Cox, with more than 23 million shares. Dodge and Cox is an employee-owned mutual fund that has been around since 1930 and is known for being a conservative investor with low fees. They don’t advertise, have no public relations staffers, and no sales force. The firm has only six funds. You don’t need to be rich to invest with this fund; their minimum investments are $2,500 to start, $1,000 for an IRA.


The second-biggest shareholder of FedEx is the Vanguard Group with 19 million shares; six of the top ten mutual funds in FedEx are Vanguard Funds. Surely many Vanguard investors would be considered wealthy but many would not. As of this summer, more than 30 million people in about 170 countries invest in Vanguard funds.


The ninth-largest shareholder of FedEx stock, with a bit more than 3 million shares, is the Bill & Melinda Gates Foundation Trust, which manages the endowment assets. This is the trust that manages the money and generates the revenue, so that the Gates Foundation can support environmental groups, health research, vaccines, clean water projects, and so on.

Among mutual funds, the sixth-largest holder of FedEx stock shares is the Canada Pension Plan, which is part of the Canadian public pension plan for everyone who is over 65 and paid into the plan at some point. CPP manages $392 billion (in Canadian dollars) in investment assets for 20 million Canadians.


There’s this perception that corporate stock shareholders must be fat-cats lighting up cigars with dollar bills, or that higher dividends to shareholders represent some sort of economic injustice. But the people who benefitted from those dividends included both wealthy millionaires and Canadian retirees, big institutional investors and small investors, as well as those administering the Gates Foundation grants. As of this writing, FedEx stock is about $157. Who owns FedEx? You can, or you may already. You would probably be surprised to learn who owns a share of what in this country. CALPERS, the California Public Employees Retirement System, owns a $9 million corporate bond from FedEx.

Separately, you know what else is FedEx doing with its money? Adding $1 billion to its employees’ pension plan.