UPDATE 1-Teamsters push for independent FedEx chairman

* Cite share performance and executive pay

* Have been pushing idea at FedEx since 2007

* FedEx annual shareholders' meeting to be held Sept. 24

By Lynn Adler

Sept 10 (Reuters) - The International Brotherhood of Teamsters is urging FedEx Corp investors to push for an independent board chairman, stripping that role from the company's chief executive officer, Fred Smith, citing share performance and executive pay.

In a letter to large FedEx institutional investors, the Teamsters union said on Monday they are seeking support for their proposal for independent board leadership at the company's annual meeting on Sept. 24.

"Having Smith as CEO and chairman of the board has lead to excessive executive pay and poor performance over the long term for investors," Ken Hall, general secretary-treasurer of the International Brotherhood of Teamsters, said in a statement.

FedEx employees, unlike those at larger rival United Parcel Service Inc, are considered independent contractors and are not represented by the Teamsters.

"This is a corporate governance concern that we push at a number of companies that we hold shares with," said Teamsters spokesman Galen Munroe.

FedEx spokesman Jess Bunn cited the company's 2012 proxy statement that backs the current structure with Smith holding the positions of CEO and chairman.

"The Board believes that FedEx's corporate Governance Guidelines help ensure that strong and independent directors will continue to play the central oversight role necessary to maintain FedEx's commitment to the highest quality corporate governance."

The Teamsters introduced their proposal for independent board leadership at FedEx in 2007, and have pushed for similar action at other companies including Republic Airways Holdings Inc and McKesson Corp, Munroe said.

About 36 percent of votes cast backed the proposal for governance reform last year - 42 percent if excluding the shares held by CEO Smith and the Smith family - up from roughly 26 percent when it was first proposed in 2007, the Teamsters letter said.

FedEx shares are up about 6 percent so far this year at $87.96 while UPS shares are little changed at $73.05.

The Teamsters said FedEx stock lagged the S&P 500 Index as well as UPS shares over the past three- and five-year periods.

FedEx, which reports fiscal first-quarter results on Sept. 18, cut its profit outlook on Sept. 4, blaming a weak global economy.

The company, which has been overhauling its fleet to add more fuel-efficient planes, is expected to provide more detail on cost-cutting measures next week. FedEx has also announced a voluntary buyout.

Meantime, the CEO's pay increased by more than $7 million in fiscal 2011 to $13.7 million, "driven by massive non-equity incentive compensation," according to the Teamsters statement.

"While the company's focus has been to reduce costs by restructuring and cutting jobs, it seems the sky is the limit when it comes to CEO pay," said Hall.

Currently, the board has a "presiding director" position rather than the independent board chair position the Teamsters seek.