FedEx Corp. will draw down $1.5 billion from a credit facility and significantly cut the salary of Chairman and CEO Frederick Smith as the company tries to weather the economic shock caused by the coronavirus pandemic.
The package delivery giant said the credit line drawdown is aimed at shoring up its cash position "to preserve financial flexibility in light of disrupted access to commercial paper markets and current uncertainty in the global financial markets."
FedEx said it has $1.86 billion remaining under its credit agreements for future borrowings.
In addition, FedEx's board approved a 91% reduction in Smith's base salary for six months, through Sept. 30.
FedEx, which previously suspended its profit guidance for fiscal 2020, said it expects to benefit from excise tax relief and payroll tax deferrals in the U.S. The company added that it is eligible for government grants, loans and investment programs, though they could entail restrictions on dividend payments and stock repurchases.