DEF 14A 1 ups3995501-def14a.htm DEFINITIVE PROXY STATEMENT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

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☑		Definitive Proxy Statement
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☐		Soliciting Material under §240.14a-12

United Parcel Service, Inc.

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Table of Contents

Notice of 2022 Annual Meeting
of Shareowners and Proxy Statement

Thursday, May 5, 2022
8:00 a.m. Eastern Time

www.virtualshareholdermeeting.com/UPS2022

Table of Contents

Table of Contents

Board Chair Letter		4

Notice of Annual Meeting		5

Proxy Statement Summary		6

Corporate Governance		10
Selecting Director Nominees		10
Board Diversity		11
Board Refreshment and Succession Planning		11
Director Independence		11
Board Leadership Structure		12
Executive Sessions of Independent Directors		12
Board and Committee Evaluations		12
Majority Voting and Director Resignation Policy		13
Risk Oversight		14
Strategic Planning and Oversight		14
Management Succession Planning and Development		15
Meetings and Attendance		15
Code of Business Conduct		15
Conflicts of Interest and Related Person Transactions		16
Transactions in Company Stock		16
Stakeholder Engagement		17
Communicating with the Board of Directors		17
Political Contributions and Lobbying		18
Sustainability		19
Human Capital Management		20
Corporate Governance Guidelines and Committee Charters		21

Our Board of Directors		22
Proposal 1 — Director Elections		22
Committees of the Board of Directors		29
2021 Director Compensation		30

Executive Compensation		31
Compensation Committee Report		31
Compensation Discussion and Analysis		31
2021 Summary Compensation Table		44
Supplemental 2021 Compensation Table		45
2021 Grants of Plan-Based Awards		46
2021 Outstanding Equity Awards at Fiscal Year-End		47
2021 Option Exercises and Stock Vested		48

2021 Pension Benefits		49
2021 Non-Qualified Deferred Compensation		50
Potential Payments on Termination or Change in Control		52
Equity Compensation Plans		55
Median Employee to CEO Pay Ratio		55
Proposal 2 — Advisory Vote to Approve Named Executive Officer Compensation		56

Ownership of Our Securities		57
Securities Ownership of Certain Beneficial Owners and Management		57
Delinquent Section 16(a) Reports		58

Audit Committee Matters		59
Proposal 3 — Ratification of Auditors		59
Audit Committee Report		59
Principal Accounting Firm Fees		61

Shareowner Proposals		62
Proposal 4 — Shareowner Proposal Requesting the Board Prepare an Annual Report on Lobbying Activities		62
Proposal 5 — Shareowner Proposal Requesting the Board Prepare a Report on the Alignment of Lobbying Activities with the Paris Climate Agreement		65
Proposal 6 — Shareowner Proposal to Reduce the Voting Power of Class A Stock from 10 Votes Per Share to One Vote Per Share		67
Proposal 7 — Shareowner Proposal Requesting the Adoption of Independently Verified Science-Based Greenhouse Gas Emissions Reduction Targets		69
Proposal 8 — Shareowner Proposal Requesting a Report on Balancing Climate Measures and Financial Returns		72
Proposal 9 — Shareowner Proposal Requesting the Board Prepare an Annual Report on Diversity and Inclusion		75

Important Information About Voting at the 2022 Annual Meeting		78

Other Information for Shareowners		82
Solicitation of Proxies		82
Eliminating Duplicative Proxy Materials		82
Submission of Shareowner Proposals and Director Nominations		82
2021 Annual Report on Form 10-K		83
Other Business		83

Table of Contents

United Parcel Service, Inc.
55 Glenlake Parkway, N.E.
Atlanta, GA 30328

March 21, 2022

Dear Fellow Shareowners:

It is my pleasure to invite you to the 2022 Annual Meeting of Shareowners. This is your opportunity to share your views with the Company and the Board of Directors. We take this feedback into account as we perform our board responsibilities.

The uncertainty resulting from the pandemic continued to challenge us during 2021. Despite this, the Company capitalized on opportunities to create long-term value as it continued to execute its strategy – Customer First, People Led, Innovation Driven.

Carol completed a successful first full year as CEO, aligning UPS leadership and executing under her Better, Not Bigger strategic framework. Carol’s leadership and the board’s oversight have strengthened the link between the Company’s strategic framework and its financial commitments, connecting purpose to strategy.

We understand that delivering on our financial targets is critical to creating long-term shareholder value. In 2021, the Company generated record results, including strong profit growth through increased margins in all segments, primarily facilitated by management’s focus on executing strategic initiatives, including targeted international growth, healthcare, and small and medium-sized businesses. All of this occurred with an increased emphasis on attracting, developing, and retaining a motivated and valued workforce that embraces diversity and inclusion. The Company’s emphasis on taking care of its customers and employees positions us well for sustainable success.

In 2021, the board oversaw the development of new sustainability and ESG goals, including the goal of becoming carbon neutral by 2050, the goal of having 28% women in management and the goal of maintaining 35% ethnically diverse company management. The board also facilitated the first publication of the Company’s EEO-1 report and the formal delegation of human capital oversight responsibility to the board’s Compensation Committee. Our five new directors have contributed significantly to boardroom discussions related to the advancement of these matters. However, we understand there is still more work to do at this important time.

The board is also proud of the efforts of all UPSers who helped drive our purpose - moving our world forward by delivering what matters. Since its founding almost 115 years ago, UPS has fostered an employee ownership culture, with employees regularly answering the call to help one another and our communities. In 2021, the Company achieved a number of significant milestones, including delivering over 1 billion doses of the COVID-19 vaccine. The board continues to believe that this culture is significantly facilitated by the Company’s capital structure. UPS’s unique employee ownership model has helped it grow and thrive by allowing management to run the Company with a sense of purpose by focusing on sustainable long-term value creation benefiting all stakeholders. It is indicative of this culture that the board and management have embraced the increased stakeholder focus on environmental, social and governance matters.

I want to encourage all my fellow shareowners to vote. We are grateful to those shareowners who have previously shared their views. As we approach the Annual Meeting, I encourage you to contact us with any questions or feedback at 404-828-6059.

On behalf of the entire Board of Directors, thank you for your continued support.

William Johnson
UPS Board Chair

Notice of Annual Meeting of Shareowners and 2022 Proxy Statement

Table of Contents

Notice of Annual Meeting

UNITED PARCEL SERVICE, INC.

55 Glenlake Parkway, N.E., Atlanta, Georgia 30328

	●	Date and Time: May 5, 2022, 8:00 a.m. Eastern Time
	●	Place: The meeting will be held exclusively online via webcast at: www.virtualshareholdermeeting.com/UPS2022.
	●	Record Date: March 9, 2022
	●	Distribution Date: A Notice of Internet Availability of Proxy Materials or the proxy statement is first being sent to shareowners on or about March 21, 2022.
	●	Voting: Holders of class A common stock are entitled to 10 votes per share; holders of class B common stock are entitled to one vote per share. Your vote is important. Please vote as soon as possible through the Internet, by telephone or by signing and returning your proxy card (if you received a paper copy of the proxy card). Your voting options are described on the Notice of Internet Availability of Proxy Materials, voting instruction form and/or proxy card.
	●	Attending the Meeting: You or your proxyholder can participate, vote, ask questions and examine our list of shareowners at the meeting by visiting www.virtualshareholdermeeting.com/UPS2022 and using your 16-digit control number found on your proxy card, voting instruction form or Notice of Internet Availability. Shareowners who do not receive a 16-digit control number should consult their voting instruction form or Notice of Internet Availability and may need to request a legal proxy from their bank, broker or other nominee in advance of the meeting in order to participate. For more information, please see page 80.

Important Notice Regarding the Availability of Proxy Materials for the Shareowner Meeting to be Held on May 5, 2022: The Proxy Statement and our 2021 Annual Report are available at www.proxyvote.com. Questions? Call 404-828-6059 (option 2).

By order of the Board of Directors

Norman M. Brothers, Jr.
Secretary
Atlanta, Georgia
March 21, 2022

Items of Business

	Voting Choices	Board Voting Recommendations	Page
Company Proposals:
1. Elect 13 director nominees named in the Proxy Statement to serve until the 2023 Annual Meeting and until their respective successors are elected and qualified	● Vote for all nominees ● Vote against all nominees ● Vote for some nominees and against others ● Abstain from voting on one or more nominees	FOR EACH NOMINEE	22
2. Approve, on an advisory basis, named executive compensation	● Vote for the resolution ● Vote against the resolution ● Abstain from voting on the resolution	FOR	56
3. Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2022	● Vote for ratification ● Vote against ratification ● Abstain from voting on ratification	FOR	59
Shareowner Proposals:
4. - 9. Advisory votes on 6 shareowner proposals, only if properly presented	● Vote for each proposal ● Vote against each proposal ● Abstain from voting on the proposals	AGAINST EACH PROPOSAL	62


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Table of Contents

Proxy Statement

UNITED PARCEL SERVICE, INC.

55 Glenlake Parkway, N.E., Atlanta, Georgia 30328

This Proxy Statement contains important information about the 2022 Annual Meeting of Shareowners (the “Annual Meeting”). We are providing these proxy materials to you because our Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting. The Annual Meeting will be held online only on May 5, 2022, at 8:00 a.m. Eastern Time, at www.virtualshareholdermeeting.com/ UPS2022. Shareowners can participate, ask questions, vote and examine our shareowner list during the meeting through this website.

All properly executed written proxies, and all properly completed proxies submitted through the Internet or by telephone, that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with the directions given in the proxy, unless the proxy is revoked prior to completion of voting at the meeting. Only owners of record of shares of the Company’s common stock as of the close of business on March 9, 2022 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting (or any adjournment or postponement of the Annual Meeting). We are first mailing this Proxy Statement on or about March 21, 2022.

Proxy Statement Summary

This summary highlights information contained elsewhere in this Proxy Statement.

Corporate Governance

Following are some of our key governance policies and practices:

	●	We maintain a diverse and independent board; all our directors are independent, other than our Chief Executive Officer (“CEO”);
	●	We have an independent Board Chair who is highly engaged and experienced;
	●	Our independent directors meet in executive sessions without management at each board meeting;
	●	We hold annual elections for all directors; and we provide for majority voting in uncontested director elections;
	●	The board is fully engaged in the strategic planning process, conducting an in-depth annual strategy review and overseeing progress throughout the year;
	●	The board’s Risk Committee consists entirely of independent board members and is responsible for overseeing the identification and evaluation of enterprise risks;
	●	We regularly evaluate our governance policies and practices, and make changes when appropriate; including recently separating the Chair and CEO roles, providing our shareowners with an annual say on pay vote, and delegating additional human capital oversight responsibilities to the Compensation and Human Capital Committee;
	●	We regularly engage with stakeholders on environmental, social and governance (“ESG”) matters, for example during this proxy season management contacted holders of over 47% of our class B common stock to discuss sustainability initiatives, our commitments to social justice and executive compensation matters;
	●	We maintain robust stock ownership guidelines, including a target ownership of eight times annual salary for the CEO, five times annual salary for other executive officers and five times the annual retainer for directors; and
	●	We prohibit our executive officers and directors from hedging or pledging their ownership in UPS stock.


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Proxy Statement Summary

Our Board

Our independent Board of Directors is responsible for the strategic oversight of UPS. A summary of their relevant skills, experience and diversity is below. For more information, see page 22.

Our directors’ broad professional skills and experiences contribute to a wide range of perspectives in the boardroom

Diversity in our boardroom supports UPS’s continued success


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Election of Directors

As a group, our 13 director nominees are appropriately skilled and experienced to effectively oversee and constructively challenge the performance of management in the execution of our strategy.

The board recommends you vote FOR each director nominee listed below. For more information, see page 22.

Name	Age	Director Since	Occupation	Committee(s)	Other Public Company Boards
Independent Directors
Rodney Adkins	63	2013	Former Senior Vice President, International Business Machines Corporation	– Risk (Chair) – Compensation and Human Capital	3
Eva Boratto	55	2020	Chief Financial Officer, Opentrons Labworks, Inc.	– Audit (Chair)	0
Michael Burns	70	2005	Former Chairman, President and Chief Executive Officer, Dana Incorporated	– Audit	0
Wayne Hewett	57	2020	Senior Advisor to Permira, and Chairman of Cambrex Corporation	– Audit	2
Angela Hwang	56	2020	Group President, Pfizer Biopharmaceuticals Group, Pfizer, Inc.	– Audit	0
Kate Johnson	54	2020	Former President, Microsoft U.S., Microsoft Corporation	– Nominating and Corporate Governance – Risk	0
William Johnson⁽¹⁾	73	2009	Former Chairman, President and Chief Executive Officer, H.J. Heinz Company	– Nominating and Corporate Governance (Chair) – Executive	1
Ann Livermore	63	1997	Former Executive Vice President, HP Inc.	– Compensation and Human Capital (Chair) – Risk – Executive	3
Franck Moison	68	2017	Former Vice Chairman, Colgate-Palmolive Company	– Nominating and Corporate Governance – Risk	1
Christiana Smith Shi	62	2018	Former President, Direct-to-Consumer, Nike, Inc.	– Compensation and Human Capital – Risk	1
Russell Stokes	50	2020	President and Chief Executive Officer, GE Aviation Services	– Compensation and Human Capital – Nominating and Corporate Governance	0
Kevin Warsh	51	2012	Former Member of the Board of Governors of the Federal Reserve System, Distinguished Visiting Fellow, Hoover Institution, Stanford University	– Compensation and Human Capital – Nominating and Corporate Governance	1
Non-Independent Director
Carol Tomé	65	2003	Chief Executive Officer	– Executive (Chair)	1


(1)	Independent Board Chair.


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Proxy Statement Summary

Executive Compensation

Compensation Practices

A significant portion of executive compensation is at-risk and tied to Company performance. This aligns executive decision-making with the long-term interests of our shareowners. We also have a longstanding owner-manager culture. Our compensation practices that support these principles include:

	●	Payments with a balanced mix of cash and equity, providing a degree of financial certainty and appropriate incentives to retain and motivate executives;
	●	Annual and long-term performance incentive awards in the form of equity grants containing vesting requirements beyond the performance period, furthering both retention and incentive goals;
	●	Annual and long-term performance incentive award payouts that are dependent upon the achievement of multiple distinct goals, avoiding overemphasis on any one metric and mitigating excessive risk-taking;
	●	Long-term performance incentive awards with a three-year performance period;
	●	Stock option awards that vest over a five-year period and only provide value if our stock price increases;
	●	Incentive compensation plans that include clawback provisions that permit recovery of awards granted to executive officers;
	●	Incentive compensation plan awards require a “double trigger” — both a change in control and a termination of employment — to accelerate vesting; and
	●	No tax gross-ups on equity awards or golden parachute excise taxes.

2021 Compensation Actions

Key 2021 compensation decisions affecting our executive officers included:

	●	Most total direct compensation was performance-based and considered “at risk” (90% for the CEO and 85% for all other named executive officers (“NEOs”) as a group). See page 32;
	●	Base salary increases for the NEOs as a result of the annual salary review process. See page 35;
	●	Bifurcating the performance period for the annual incentive awards to account for the uncertainty attributable to the COVID-19 pandemic. See page 35;
	●	Annual incentive awards for all NEOs were earned above target. See page 37; and
	●	Previously granted 2019 Long-Term Incentive Performance (“LTIP”) awards, which had three-year performance goals ending in 2021, were earned above target. See page 39.

Annual Say on Pay Vote

We maintain executive compensation programs that support the long-term interests of our shareowners. We provide shareowners the opportunity to vote annually, on an advisory basis, to approve the compensation of our NEOs, as described in the Compensation Discussion and Analysis section and in the compensation tables and accompanying narrative disclosure in this proxy statement. For more information, see page 56.

The board recommends you vote FOR the advisory vote to approve named executive officer compensation.

Ratification of the Appointment of the Independent Registered Public Accounting Firm

The Board of Directors has appointed Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2022. The board recommends you vote FOR the ratification of the appointment of Deloitte & Touche LLP. For more information, see page 59.

Shareowner Proposals

The board recommends you vote AGAINST the shareowner proposals. More information about these proposals starts on page 62.


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Table of Contents

Corporate Governance

We maintain robust governance policies and practices that benefit the long-term interests of all stakeholders. We regularly review and update our corporate governance practices in response to the evolving needs of our business, shareowner and other stakeholder feedback, regulatory changes, and other corporate developments. Following is an overview of our corporate governance structure and processes, including key aspects of our board operations.

Selecting Director Nominees

Maintaining a board of individuals independent of management, and of the highest personal character, integrity and ethical standards, is critical to the proper functioning of the board. The Nominating and Corporate Governance Committee also seeks to promote diversity in the boardroom with respect to gender, age, ethnicity, skills, experience, perspectives, and other factors. Our directors’ biographies highlight the factors that the board considered when nominating these individuals.

Nomination Process

1	Board Composition Review
	The board’s annual self-evaluation helps the Nominating and Corporate Governance Committee identify needs by assessing areas where additional diversity, perspectives, expertise, skills or experience may be desired. The Nominating and Corporate Governance Committee also conducts regular in-depth board composition reviews.
2	Candidate Identification
	The Nominating and Corporate Governance Committee uses a variety of sources to identify a diverse pool of potential candidates. Sources include board members, members of management, independent consultants and shareowner recommendations. Prospective candidates are evaluated after taking into account feedback from consultants, management and board members, candidate background and qualification reviews, and open discussions between the Nominating and Corporate Governance Committee and the full board. This process allows for active and ongoing consideration of potential directors with a focus on long-term Company strategy.
3	Shortlisted Candidates
	The Nominating and Corporate Governance Committee maintains a diverse list of potential director candidates according to desired skills, experiences and backgrounds. The list is reviewed at each Nominating and Corporate Governance Committee meeting and updated as appropriate. Each candidate is evaluated to ensure that existing and planned future commitments would not materially interfere with expected responsibilities to the Company.
4	Recommendation, Nomination and Annual Election
	Candidates recommended by the Nominating and Corporate Governance Committee and approved by the board are nominated for election. Directors are elected annually.
Result:	5 new independent directors added since 2020

Shareowner Recommendations, Nominations and Proxy Access

Shareowner recommended director candidates are considered on the same basis as recommendations from other sources. Shareowners can recommend a candidate by writing to the following address: UPS Corporate Secretary, 55 Glenlake Parkway, N.E., Atlanta, Georgia 30328. Submissions must contain the prospective candidate’s name and a detailed description of the experience, qualifications, attributes and skills that make the individual a suitable director candidate.

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Corporate Governance

We also provide proxy access for shareowner director nominees. A single shareowner, or group of up to 20 shareowners, that has owned at least 3 percent of UPS’s outstanding stock continuously for at least three years, may include up to 20 percent of the board seats or two directors (whichever is greater), as director nominees in UPS’s proxy materials for an annual meeting of shareowners. Our Bylaws set forth the requirements for the formal shareowner nomination process for director candidates. These requirements are summarized under “Other Information for Shareowners” on page 82.

Board Diversity

A wide range of viewpoints is critical to effective board deliberations, corporate governance and oversight. Diversity with respect to gender, age, ethnicity, skills, experience, perspectives, and other factors is a key consideration when identifying and recommending director nominees. The Nominating and Corporate Governance Committee assesses board diversity through periodic board composition evaluations. While the Company does not have a formal policy on board diversity, our Corporate Governance Guidelines emphasize diversity, and the Nominating and Corporate Governance Committee actively considers diversity in recruitment and nominations of director candidates.

	Gender		Ethnicity		Age

Board Refreshment and Succession Planning

The Nominating and Corporate Governance Committee regularly considers the long-term makeup of our Board of Directors and how board composition changes over time. They also consider the skills needed on our board as our business evolves. The board seeks to balance the knowledge and experience that comes from longer-term board service with new ideas and perspectives that can come from new directors.

Since 2020, we have added five new directors, and have had four directors retire.

The average tenure of the director nominees reflects an appropriate balance between different perspectives brought by newer and long-serving directors.

Director Independence

Having a significant majority of non-management independent directors encourages robust debate and challenged opinions in the boardroom.

Our Corporate Governance Guidelines include director independence standards consistent with the New York Stock Exchange (“NYSE”) listing standards. Our Corporate Governance Guidelines are available on the governance section of our investor relations website at www.investors.ups.com.


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The board has evaluated each director’s independence and considered whether there were any relevant relationships between UPS and each director, or any member of his or her immediate family. The board also examined whether there were any relationships between UPS and organizations where a director is or was a partner, principal shareowner or executive officer. Specifically, the board evaluated certain ordinary course business transactions and relationships between UPS and the organizations that currently or in the prior year employed Eva Boratto, Mike Burns, Wayne Hewett, Angela Hwang, Kate Johnson, Russell Stokes and Kevin Warsh, or their immediate family members, as an executive officer. The board also evaluated the ordinary course business transactions and relationships between UPS and any organizations where Rod Adkins, Wayne Hewett, Christiana Smith Shi and Kevin Warsh, or their immediate family members, were a partner or principal shareowner. In each case, no such transactions exceeded the thresholds in UPS’s Corporate Governance Guidelines. The board determined that none of these transactions or relationships were material to the Company, the individuals or the organizations with which they were associated.

The board has determined that each of the director nominees (other than our current CEO, Carol Tomé), is independent. With respect to directors that served during 2021 but have retired, the board has determined that each such individual was independent. All members of the Audit Committee, Compensation and Human Capital Committee, Nominating and Corporate Governance Committee and Risk Committee are independent.

Board Leadership Structure

Based on the periodic evaluation and recommendation of the Nominating and Corporate Governance Committee, the board determines the most appropriate board leadership structure, including who should serve as Board Chair, and whether the roles of Board Chair and CEO should be separated or combined.

In connection with Carol Tomé’s election as CEO, the board determined that it was in the best interests of the Company to enable Carol to focus on leading the Company, and separated the roles of Chair and CEO. Bill Johnson, who had been serving as our independent Lead Director, was appointed Board Chair on October 1, 2020.

Bill has served on our board since 2009 and had served as independent Lead Director since 2016. He has deep institutional knowledge of the Company and provides strong continuity of leadership. He devotes significant time to understanding our business and communicating with the CEO, and other directors, between meetings. He draws on his extensive knowledge of our business, industry, strategic priorities and competitive developments to set the board’s agendas in collaboration with the CEO, and he seeks to ensure that board meetings are productive and interactions with the directors facilitate a useful exchange of viewpoints. Carol is available to all directors between meetings and meets regularly with the Board Chair, and with the directors individually and as a group, to receive feedback from the board. Bill’s collaboration with Carol allows the board to focus attention on the issues of greatest importance to the Company and its shareowners and our CEO to focus primarily on leading the Company.

Furthermore, all the members of each of the Audit Committee, the Compensation and Human Capital Committee, the Nominating and Corporate Governance Committee and the Risk Committee are independent. Each committee is led by a chairperson who sets the meeting agendas and reports to the full board on the committee’s work. Additionally, the independent directors meet in executive session without management present at each board meeting, as described below.

Executive Sessions of Independent Directors

Directors hold executive sessions without management present at each regular board meeting. The Board Chair determines the agenda and presides at each session. The Board Chair generally invites the CEO to join a portion of the executive session to receive feedback from the board and when deemed appropriate otherwise. In addition, during the year the Board Chair meets individually with each director to discuss issues that are important to the board and to solicit and provide further feedback.

Board and Committee Evaluations

The board employs both an ongoing informal and a formal annual process to evaluate its performance and the contributions of individual directors to the successful execution of the board’s obligations. The Board Chair frequently considers the performance of the board and the board’s committees and has informal discussions about individual director contributions to the board. The Board Chair shares feedback from these discussions with the full board and with individual board members. In addition, during 2021 the CEO met individually with each director to discuss how best to utilize the director’s skills and experience. The feedback from these meetings was reviewed with the Board Chair.

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Corporate Governance

Formal Evaluation Process

1	Detailed Formal Annual Evaluation Process
	The Board of Directors, Audit Committee, Compensation and Human Capital Committee, Nominating and Corporate Governance Committee and Risk Committee each conduct an annual self-assessment. The Nominating and Corporate Governance Committee oversees the annual board assessment process and the implementation of the annual committee self-assessments.
2	Questionnaires
	All board and committee members complete a detailed confidential questionnaire each year. The questionnaire provides for quantitative ratings in key areas, including overall board effectiveness, meeting effectiveness, access to information, information format, board committee structure, access to management, succession planning, meeting dialogue, communication with the CEO, operational reporting, financial oversight, capital structure and financing, capital spending, long-term strategic planning, risk oversight, crisis management and time management. The questionnaire also allows directors to provide written feedback and make detailed anonymous comments.
3	Review
	The results of the committee self-assessments are reviewed by each committee and discussed with the full board. The Chair of the Nominating and Corporate Governance Committee reviews the results of committee self-assessments and discusses the responses with the chairs of the other board committees as appropriate. The Chair of the Nominating and Corporate Governance Committee also reviews and discusses the board evaluation results with the full board.
4	Follow-up
	Matters requiring follow-up are addressed by the Chair of the Nominating and Corporate Governance Committee or the chairs of the other committees as appropriate.
Result	Feedback from the evaluations has driven several improvements in board operations over the last few years, including the format and delivery of board meeting materials, board meeting agendas and recurring topics, strategic planning and oversight, director recruitment practices and orientation, and succession planning.

Majority Voting and Director Resignation Policy

Our Bylaws provide for majority voting in uncontested director elections. The number of votes cast for a nominee must exceed the number of votes cast against that person. Any incumbent director who does not receive a majority of the votes cast must offer to resign from the board.

In such an event, the Nominating and Corporate Governance Committee will recommend to the board whether to accept or reject the director’s offer to resign after considering all relevant factors. The board will act on the recommendation within 90 days following certification of the election results after considering all relevant information.

Any director who offers to resign must recuse himself or herself from the board vote, unless the number of independent directors who were successful incumbents is fewer than three. The board will promptly disclose its decision regarding any director’s offer to resign, including its reasoning. If the board determines to accept a director’s offer to resign, the Nominating and Corporate Governance Committee will recommend whether and when to fill such vacancy or whether to reduce the size of the board.


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Risk Oversight

Board Oversight of Risk


Board of Directors
Risk management oversight is an essential board responsibility. The board regularly discusses our most significant risks and how these risks are being managed. The Company’s enterprise risk management process is designed to identify potential events that may affect the achievement of the Company’s objectives or have a material adverse effect on the Company. The board reviews periodic assessments from this process and participates in the Company’s annual risk survey. The board has delegated to its standing committees specific risk oversight responsibilities as set out below and receives regular reports from the committees on appropriate areas of risk management.
Risk Committee	Audit Committee	Compensation and Human Capital Committee	Nominating and Corporate Governance Committee
Oversees management’s identification and evaluation of strategic enterprise risks, including risks associated with intellectual property, operations, privacy, technology, information security, cybersecurity and cyber incident response, and business continuity.	Oversees policies with respect to financial risk assessment, including guidelines to govern the process by which major financial and accounting risk assessment and management is undertaken.	Considers risks associated with compensation policies and practices, with respect to both executive compensation and compensation generally, and considers other human capital risks.	Considers risks related to governance matters, including succession planning.

The Company’s Chief Legal and Compliance Officer, Chief Information Officer, and the Vice President of Compliance and Internal Audit each meet individually with the Risk Committee on a regular basis.

The Risk Committee updates the full board annually on the Company’s enterprise risk management survey and risk assessment results. The board provides feedback to the Company about significant enterprise risks and assesses the Company’s identification of its most significant risk areas. The Risk Committee also coordinates with the Audit Committee to enable the Audit Committee to perform its risk related responsibilities.

The Audit Committee has additional risk assessment and risk oversight responsibilities, specifically with respect to financial risk assessment. The Chief Legal and Compliance Officer, CEO, Chief Financial Officer and Vice President of Compliance and Internal Audit each meet individually with the Audit Committee on a regular basis.

In addition, the Company’s Chief Legal and Compliance Officer reports directly to our CEO, providing visibility into the Company’s risk profile. The board believes that the work undertaken by its committees, together with the work of the full board and the Company’s senior management, enables effective oversight of the Company’s management of risk.

Strategic Planning and Oversight

Oversight of strategic planning requires a high level of constructive engagement between management and the board. The Company maintains a process that allows the board to leverage its substantial experience and expertise to remain fully engaged in the Company’s strategic planning process. Management develops and prioritizes strategic plans on an annual basis. Management then reviews these plans with the board on an annual basis, along with the Company’s challenges, opportunities, industry dynamics, and legal, regulatory and governance developments, and other factors.

Management provides the board comprehensive updates throughout the year regarding progress on the Company’s strategic plans. Management also provides regular updates regarding the achievement of the Company’s financial goals. In addition, the CEO communicates regularly with the board on important business opportunities, financial and operational performance matters, risks and other developments such as labor and customer relations, both during and outside the regular board meeting cycle.

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Corporate Governance

Management Succession Planning and Development

Succession planning and talent development are important at all levels within our organization. The board oversees management’s emergency and long-term succession plans at the executive officer level, most importantly the CEO position. The board annually reviews succession plans for senior management including the CEO, all in the context of the Company’s overall business strategy and with a focus on risk management. More broadly, the board and the Compensation and Human Capital Committee are regularly updated on key talent indicators for the overall workforce, including diversity, recruiting and development programs.

The board’s succession planning activities are ongoing and strategic and are supported by board committees and independent third-party consultants as needed. In addition, the CEO annually provides an assessment to the board of senior leaders and their potential to succeed at key senior management positions. As a part of this process, potential leaders interact with board members through formal presentations and during informal events.

We also utilize a formal director engagement program in which directors meet with individual executive officers, visit Company operations, participate in employee events and receive in-depth subject matter updates outside of the regular board meeting process. These additional engagements encourage the ongoing exchange of ideas and information between directors and management, facilitate the board’s oversight responsibilities, and support succession planning efforts.

Meetings and Attendance

The board held five meetings during 2021. Also, during 2021, the Audit Committee met ten times, the Compensation and Human Capital Committee met five times, the Nominating and Corporate Governance Committee met four times and the Risk Committee met three times. The Executive Committee met one time in 2021. Prior to board meetings, the Board Chair and the board’s committee chairs work with management to determine and prepare agendas for the meetings. Board meetings generally occur over two days. Board committees generally meet on the first day of the board meeting, followed by the board meeting. The second day typically consists of reports from each committee chair to the full board, additional presentations by internal business leaders or others with expertise in various subject matters, and an executive session consisting of only independent board members. The executive sessions are chaired by our Board Chair.

All directors attended 100% of the total number of board and any committee meetings of which he or she was a member in 2021. Our directors are expected to attend each annual meeting, and all directors who were then members of the board attended the 2021 Annual Meeting. The independent directors met in executive session at all the board meetings held in 2021.

Code of Business Conduct

We are committed to conducting our business in accordance with the highest ethical principles. Our Code of Business Conduct is applicable to anyone who represents UPS, including our directors, executive officers and all other employees and agents of UPS. A copy of our Code of Business Conduct is available on our investor relations website at www.investors.ups.com.


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Conflicts of Interest and Related Person Transactions

Our Audit Committee is responsible for overseeing our Code of Business Conduct, which includes policies regarding conflicts of interest. The Code requires emp

SEC Form DEF 14A filed by United Parcel Service Inc.