Written by: Stuart Chirls, Senior Editor CSX has a new CEO. The Jacksonville, Fla.-based railroad has agreed to a deal with hedge fund Mantle Ridge LP to name E. Hunter Harrison as chief executive and to nominate for five seats on its board. The agreement comes after a report March 3 that the sides were nearing a deal but still negotiating terms. Harrison, a past Railway Age Railroader of the Year who presided over a radical revamping of CP Rail, will get a four-year contract. Harrison, Mantle Ridge founder Paul Hilal, and three others will stand for election to the CSX board. The hedge fund had earlier sought six seats. Investors flocked to CSX shares when news of Harrison’s interest first broke, adding $10 billion in equity to CSX in a matter of weeks. But some industry observers questioned whether CSX, while far from a basket case, was really in need of an intensive makeover. On Feb. 21, CSX announced that Chairman and Chief Executive Officer Michael Ward and President Clarence Gooden will retire, effective May 31. The company at the same time announced that its was eliminating 1,000 management positions. CSX initially balked at the Mantle Ridge proposal, which called for a total compensation package for Harrison of more than $300 million, including $84 million to reimburse Mantle Ridge for buying out Harrison's severance with Canadian Pacific, and a stock option equal to 1% of CSX common stock, at the time valued at $159.5 million. The agreement was reported by the Wall Street Journal on Monday. Continue reading...
