Interviewee: Richard Peretz, Chief Financial Officer

United Parcel Service

Interviewers: Alexander Schiffer, Roy Tin

Date: 24th February 2017

Mode: Phone Interview

Duration of Interview: 32 minutes 40 seconds

Questions & Answers

What is your highest level of education?

University of Texas San Antonio, Accounting major

In management which is more important: college or experience?

The higher you go up, the more you depend on college because a lot of things that you do is cross
disciplined. When you are in lower areas, you do your job where you need to do it, but when you are
higher up, you need more knowledge because you need knowledge in economics, finance, accounting,
and statistics.

Can you define management?

The art of using leadership skills and the ability to get the desired of result with the group of employees.

How did your experience influence your management?

I was once an hourly employee too, so you really have to see things from both sides, you have to
understand people, and people have to understand what the end result is and both of you have to see this
through.

How long have you been CFO for?

A little over a year, since 2015.

Was there a previous CFO who helped you adapt to this position?

I have been at this company for 36 years, and worked under 5 different CFOs. Ive worked closely with
the last 3-4 because I was moved to corporate office.

How has the firm changed?

Changed. Technology enables efficiency and automation allows what was once done manually to be
automated, like the packaging process.

Are you managing more people?

In 1997, I managed 2000, now I manage 4000 people around the world, but you deal directly 2 3 levels
down here at corporate, the core 4500 theory. Decentralization.
How would your employees describe you as a boss?

Good listener, but I am also impatient because time sensitivity and emergency. You also want people to
understand things at the same level that you do.

How do you motivate your employees?

Let them understand the importance of the task. We have good incentives for our employees, bonus and
equity.

Can your management techniques succeed in other industries such as food or energy?

It is really about how you treat people and letting them know your expectations, knowing what you want.

What is your greatest accomplish as a CFO?

2 -3 I would say. I was part of the team that took UPS public, getting the experience and getting to know
the investor community, and the sense of accomplishment when we achieve something as a team.

What was the nature of the company after it went public?

We became very paternalistic. The whole culture is different.

What is the biggest challenge that you have faced?

You have to make split second decision. You have to understand that at higher management, you dont
have anyone else to go to. Whatever you say, it is the way to go to.

Is UPS team based or individual based?

Too much of a team, but thats the heritage and culture of UPS, paternalistic kind of culture.

What are some of your personal traits that affect your management style?

Listening, understand that you cant do it all. When you are older, you tend to become more patient. In 20
years, you will be much more patient.

Do you think your personal value is consistent with that of the corporation?

Yes, absolutely. I have been here for 36 years.

Personal Development?
Personal traits, follow up. Im more mature, listen more, look at the problem from different perspectives.
Everyone here wants to solve the same problem, as you age, you appreciate that more.

Any advice for other managers in this industry?

Make sure you have operational experience, it is much easier to manage and process what you need to do
if you understand how the parts play together.

Your HR department, when hiring, which do they weigh more: credentials or referrals?

In the field, it is more operational. We bring students, so we can bring them straight into the system. At
corporate we look at credentials more because its more paper work. You definitely need to have a good
way of talking to people, and let people feel home. It really depends on the situation, sometimes you need
someone from the outside.

What is the culture of UPS management?

Paternalistic, humbleness, open-arm. Not a star. When hiring, it depends on the particular skill set too.

Which particular department wants a special skillset?

Investment group, we are putting the money into pension fund investment, we need qualitative skills like
that. In a management job, you need to know a lot more, you need an understanding of retail and
marketing, because you are always moving around.

Who do you most frequently network with? Why?

My Peers, the 10 of us that run the company, we talk all the time.

What do you think the future is for the transportation industry?

Investor conference day, it is on our website, it is really about the use of automation. It is going to give
you the vision of our industry, drones, and automation to reduce costs and increase flexibility.

How will this future affect management?

People will need different skillsets. They will need to understand more how the machine works.

Risk Management?

Disruption in the industry. Changing of customer demands. Things like online buying

How does the company usually get affected by customer needs changing?
Just adapt, maybe from AIR to GROUND, maybe there is a warehouse closer to us.

When we discuss your experience. POLC?

I am the one who plans. You need to think long term and get people to be behind whatever the plan is. So
thats planning. Then you need to stay organized. Then we need to get the senior management on board.
We always have weekly operational meetings. We always want to do better and think long term. We need
to make sure that we are not only operating well today, but long term.

Strategic growth of UPS?

Increase capacity, investing in ourselves, grow with technology, technology integration with operations.
Some people will be affected by the change but it is also very gradual so people can adapt to it.

Effectiveness to management?

The culture of humbleness. We have 400 years of UPS experience, we all grown up in this company we
need to understand it at the most basic history.