Transport and logistics provider XPO Logistics, Inc. (NYSE:XPO) said late today that it has parted ways with Kenneth Wagers, its chief operating officer (COO), after eliminating his position.
The decision was made after the Greenwich, Connecticut-based company decided to abandon plans to pursue acquisitions in favor of stock repurchases, XPO said in a statement. The company bought back $1 billion in shares in December, and is authorized to repurchase $1.5 billion in additional shares.
Wagers was hired in April 2018 to work with XPO President Troy Cooper ahead of XPO resuming M&A activity. After XPO’s stock price plunged in December 2018 following a short-selling firm’s very negative analysis of the company, it decided that buying back shares would be a more cost-effective use of its capital. That made the COO’s role, as it was constructed when Wagers was hired, extraneous. In an filing yesterday with the Securities and Exchange Commission, XPO said that Wagers’ employment was terminated “without cause.”
Most who follow XPO expected it to return to the M&A trail in 2018 after being on the sidelines since September 2015. It made no acquisitions last year, however.
With Wagers gone, Cooper will assume the duties that would normally fall under a COO’s purview, XPO said. Cooper had been the company’s COO before Wagers was hired and the president’s position created. Cooper will also take over the company’s less-than-truckload (LTL) business on an interim basis. Wagers had held that position, also on an interim basis, since June 2018.
Wagers joined XPO from Amazon.com Inc. (NASDAQ:AMZN) where he was the chief financial officer for various Amazon operations, including last-mile, middle-mile, Amazon China, air and ocean operations, the “Amazon Fresh” grocery delivery business, and the “Prime Now” same-day operation. Some industry-watchers said Wagers’ hiring dovetailed with XPO’s launch of a service called “XPO Direct,” in which it provides a soup-to-nuts warehousing, fulfillment and delivery service to retailers akin to Amazon’s “Fulfillment by Amazon” service, which is enormously critical to Amazon.
Late last month, XPO said that its largest customer – who it wouldn’t name but who everyone knew to be Amazon – would pull $600 million in business from XPO, equal to two-thirds of Amazon’s annual business with XPO. An industry source said Amazon’s actions were “retribution” for hiring Wagers and refusing to terminate him at Amazon’s behest. Amazon denied those actions ever took place, calling the allegations “ridiculous.”
XPO made no mention of the relationship with Amazon in its announcement of Wagers’ departure.
(The story has been updated to include language in the SEC filing)