XPO Logistics has defended its strategy during the pandemic after revelations that its US chief executive Brad Jacobs was paid an incentive award of up to $80m (£57m) in the same period the company was claiming millions of pounds from the UK government in furlough payments.

Responding to claims by UK unions this week that the move is a “kick in the teeth” for XPO workers, a spokesperson for the logistics giant said: “The pandemic presented our business with unprecedented challenges, but through it all, our priority has been, and always is, the health and safety of our colleagues and customers. We all have made huge efforts to keep our operations running for our customers to ensure essential food, medical devices and e-commerce operations delivered throughout the crisis and lockdowns.

"As intended, the furlough scheme has helped us secure the jobs of our employees whose tasks were reduced or stopped due to how the lockdowns have affected the hospitality and retail sectors in particular.”

The criticism from both Unite and GMB comes ahead of XPO’s AGM tomorrow (11 May). Both unions point to HMRC figures which show that six of the company’s UK subsidiaries claimed a total of between £12m and £25m in furlough support between December 2020 and February, the only months for which data is available. The two figures relate to the maximum and minimum the companies can claim and it is the total claimed for all six.

The two unions estimate that, over the entire period of the scheme to date, XPO could have received more than £100m in furlough payments.

In a joint statement the unions said: “Despite claiming millions in furlough payments, XPO last year recorded $16.5bn (£11.69bn) in revenue with a record breaking second half of the year. In July 2020 Jacobs received a long-term cash award of up to $80m (£57m) and an annual bonus of $3.3m (£2.34m) for his handling of the Covid pandemic.”

XPO Logistics paid $6.4m (£4.6m) in cash bonuses for 2020. The firm’s top three executives also received share options worth more than $27m (£19.14m), and a new incentive scheme could see them sharing a further $144m (£102m) over six years.

The unions added that XPO’s furloughed workers are only receiving the basic 80% government rate, with XPO refusing to make up the additional 20% payment.

Unite national officer Matt Draper said: “The bonuses given to the chief executive are a complete kick in the teeth for the XPO workers who have risked their health to keep the company operating throughout the pandemic.

“There is clearly one rule for the bosses and another for the workers on the front line who have been denied any kind of bonus. What makes this even more sickening is that UK taxpayers' money appears to have gone straight into the pockets of the company’s American chief executive.”


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GMB national officer Mick Rix said: "XPO spend on executive pay is nothing short of greed - especially when you contrast how slow XPO was to enact UK government guidance for employers on social distancing and other requirements at the start of the pandemic.

"At one stage, XPO encouraged workers to share freezer suits at its Morrisons supermarket site in Scotland - until GMB stepped in.

"It’s time the XPO workforce was treated with respect and given a share in the vast company profits that they help contribute to."

Concerns have also been raised by Pensions and Investment Research Consultants (PIRC), an independent corporate governance and shareholder advisory consultancy which advises shareholders on how to vote at firms’ annual meetings.

It said investors should oppose XPO’s pay policy and the re-election of its pay committee at a vote in the US this Tuesday.

Pointing to the company’s pay strategy in the light of its decision to take furlough payments for XPO staff it added: “It is expected for companies relying on taxpayer support during the pandemic to make appropriate reductions in executive remuneration.”

XPO employs more than 25,000 workers in the UK and carries out transport and logistics work for leading supermarkets including Morrisons, Co-op, Waitrose and Iceland and counts Marks and Spencers, ASOS and the UK Border Force among its clients.

The unions’ call for an investigation comes as XPO continues its plan to spin off the logistics arms of its business under the new name GXO Logistics, which will be headquartered in London.

Referring to the spin off, which was announced in December last year, Jacobs recently said the move would create “two high-performing, pure-play companies to serve the best interests of all our stakeholders.”

He added: “We currently believe that this spin-off is the most effective way to unlock significant value for our customers, employees and shareholders.”