Carol Tomé is UPS’ 12th CEO in the company’s nearly 114-year history and we like her focus on making the firm’s capital allocation more efficient and leaving pure volume strategies behind. The CEO’s solid execution in her first 18 months, despite pandemic related turmoil, is partly because of her familiarity with UPS as a long-time Director (since 2003).
Tomé’s ascension to the CEO role was fortuitously timed in March of 2020 and her predecessor David Abney (65), retired after 46 years with UPS. CEO Tomé has refocused UPS on sensible operating efficiency and ROIC while emphasizing both customer and employee satisfaction.
She and CFO Brian Newman (52) have systematically reduced debt, boosted margins, and improved customer-focused key performance indicators. We also like the Board’s revamping of the executive pay plan and substantial Director refreshment in the last year.
Governance at UPS has improved in the last year. The Board split the Chief Executive Officer and Chairman roles following Carol Tomé becoming CEO in June 2020. Bill Johnson (72), who was Lead Independent Director since 2016, became Chairman. He is the former Chairman, President, and CEO of H.J. Heinz, we note that he has been on UPS’ Board since 2009. Refreshment has been a major theme across the 13 Directors in the last two years with 5 new Directors since 2020