Dive Brief:

• The United Parcel Service’s CFO, Brian Newman, will depart from his role effective June 1 in order to focus on his personal health, the package delivery company said in a Monday announcement.
• The Atlanta, Georgia-based company is evaluating candidates to succeed Newman in the role, according to the announcement. The company has not appointed an interim CFO at this time; UPS’ finance team is “reporting to our CEO for now, as we identify both internal and external candidates,” a company spokesperson told CFO Dive via email. The company declined to comment further beyond the details included in its release.
• “I am confident in the company’s continued success and growth trajectory,” Newman said in a statement included in the release. “My near-term priority is to focus on my health.”

Dive Insight:

Newman will be entitled to a cash payment of about $1.8 million, which represents “one times his annual base salary, one times his target Management Incentive Program (“MIP”) award for 2024, and the cost difference between his current medical coverage and COBRA coverage for 18 months,” according to details of his separation agreement contained in a filing with the Securities and Exchange Commission.

Newman is also entitled to a cash payment of the incentive award that he would have earned based on actual performance during the year ending Dec. 31, 2024, prorated for the portion of the year that he was employed by the company, according to the filing, as well as vesting of his 35,166 restricted performance units.

Newman has served as UPS’ finance chief since 2019, joining after a 26-year stint at PepsiCo where he held various positions including EVP, Latin America for finance, operations and IT, according to his LinkedIn profile. He joined as the parcel delivery service was making a slew of external hires and pushing forward plans for growth following a break between e-commerce behemoth Amazon and rival shipping service FedEx, according to a 2019 report in The Wall Street Journal.

The departure of their CFO comes as UPS deals with a slump in shipping volumes, with average daily volume in the U.S. declining by 3.2% for the company’s most recent quarter ended March 31. Volumes decreased by 5.8% elsewhere, with the slowdowns leading the company to report a 5.3% drop in revenue year-over-year to reach $21.7 billion, according to its earnings results. The company’s operating profit also plummeted year-over-year to $1.6 billion, a 36.5% decline from Q1 2023.

UPS has taken several steps to bolster sagging volume as it navigates softening demand, including layoffs, with the company announcing it would cut 12,000 jobs in a bid to save more than $1 billion this past January, Industry Dive sister publication Supply Chain Dive previously reported. The layoffs represent “a change in the way we work,” Newman said at the time, noting that UPS does not expect those jobs to come back as volume returns.

UPS also experienced a drop in volume during contract negotiations with the Brotherhood of Teamsters, with the company winning back about 60% of that lost volume by the end of December, CEO Carol Tomé said during UPS’ fourth quarter 2023 earnings call. The impact of its negotiations has continued to bleed through to recent quarters; higher labor costs relating to the first year of UPS’ contract with the Teamsters contributed to the dip in profit UPS experienced during the first quarter, Tomé said in April.

On Monday when announcing Newman’s departure, UPS reaffirmed the full-year guidance it issued during its most recent earnings call, where it forecast consolidated revenue between $92.0 billion to $94.5 billion.