UPS CEO Successfully Pitches New Labor Contract, Says 46% Of Compensation To Occur In First Year

United Parcel Service, Inc. UPS management reportedly stated that the expenses related to the recent Teamsters contract are lower than the amount asserted by the union.

UPS's CEO Carol Tome said that the costs incurred by the company for the new Teamsters contract are less than the" $30 billion in new money" touted by the union, as the company aims to sell investors on the agreement, in an interview with CNBC.

Related: Drop Off Your Old Gig, Pick Up This Pay Package: UPS Drivers Make $170K Under New Deal

The contract is structured with 46% of the compensation occurring in the first year, and Tome considers it cost-effective and fair. 

"It's a barbell structure where it's heavier in the beginning of the contract." Tome added. "We'll go in the middle of the contract and it steps back down. This 46% of the cost increase happens in the first year, so imagine what the last four years of the contract are!"

The increases "are really good for us and a 3.3% compounded annual growth rate," she mentioned. The agreement is seen as a "win-win-win" for the union, customers, and the company. 

Price Action: UPS shares are trading lower by 1.52% at $158.45 premarket on Tuesday.