Friday, August 24, 2012

The FedEx annual report - a winner

Corporate annual reports can often be highly effective sleep aids.  Many are predictable and almost seem to be designed to be mind numbing.  Some do stand out.

The ones that are most interesting here are those that overly highlight the brilliance of management, overstate the competitive positioning of the company, gloss over or have excuses for any mistakes made, or are turned into pure marketing material that is of little interest to an investor, or even most customers.  When an annual report that fits that profile shows up, it just screams SELL, and most of the time that's the right thing to do, not always, but almost.

My antenna for really well done annual reports is much less dialed in.  The general attitude here is that a report that is not poorly done simply meets expectations.  The exception is generally when it is obvious that a CEO has actually written his own shareholder letter, voices opinions, and states clear goals while admitting any mistakes and acknowledging possible pitfalls if  exogenous events take a wrong turn.  Those real letters, and they are not customary, are encouraging.

The FedEx report received today has no stunning CEO letter or brilliant language.  What it does do exceptionally well is highlight the strengths of the company and how it is adapting to the many changes in the global economy.  There is only a small photo of the CEO at the beginning of his blunt and determined two page letter to shareholders, while there are a series of photos of important middle managers on a couple of pages, middle managers who are responsible for vital parts of their organization but are not Vice Chairman or employees with other fancified titles.

No forensic reader of the detail of annual reports here, but this one seems to be exceptionally well organized, clearly written, and informative.  Seems like a keeper.


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