Posts Tagged ‘CSX executives’

CSX Appoints 2 Top Managers

July 10, 2018

CSX has named two new executives whose appointments are effective immediately.

They include Mark Wallace, executive vice president sales and marketing, and Diana Sorfleet, executive vice president and chief administrative officer.

Wallace joined CSX in March 2017 as executive VP corporate affairs and chief of staff, and was named executive VP and CAO in January.

He previously worked with the late E. Hunter Harrison for 20 years and began his railroad career at Canadian National in 1995 as an analyst in the taxation and treasury function to assist on CN’s initial public offering.

Wallace also worked at Canadian Pacific between July 2012 and January 2017.

Currently serving as CSX’s chief human resources officer, Sorfleet will succeed Wallace. She will be responsible for information technology, human resources, labor relations, executive compensation and aviation.

She joined CSX in June 2011 after serving in human resources at Exelon, most recently as VP of diversity and development.

CSX also announced that Kevin Boone, who previously reported to Wallace, will continue as executive VP corporate affairs. He will become responsible for corporate communications and report to CEO James Foote.

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CSX Shareholders to Mull Executive Pay

May 10, 2018

When CSX holds its annual meeting on May 18 executive compensation will be on the agenda.

However, the issue is not the pay of current CEO James M. Foote or his management team but rather that of the late E. Hunter Harrison.

Harrison, who died late last year, was awarded a compensation package that a shareholder advisory firm wants CSX shareholders to renounce during the annual meeting.

Institutional Shareholder Services said CSX should have imposed a clawback on the $84 million reimbursement agreement with Harrison and hedge fund Mantle Ridge, which was instrumental in luring Harrison away from Canadian Pacific and overseeing his selection in spring 2017 to replace then CEO Michael Ward.

ISS contends that a clawback provision would have enabled CSX to recover a portion of the payment it made to Mantle Ridge after Harrison died.

Those payments were designed to compensate Mantle Ridge for money it paid Harrison for giving up some of his CP compensation by resigning as CEO before his term ended in order to join CSX.

The shareholder advisory firm also said Harrison’s pay should have been completely based on performance and that the operating operating income target for the management incentive plan should have been higher.

It was instead set below the operating income level CSX reported in 2016.

CSX shareholders approved by a wide margin Harrison’s compensation package last June.

Management of CSX is opposed to the ISS proposals and has urged shareholders to consider that CSX stock value has increased 53 percent over the past year.

It also noted that Harrison’s stock options of $115 million were forfeited upon his death and had been evenly divided between performance vesting and time vesting over four years, which CSX said “was not atypical for equity incentives.”

CSX also said it operating income incentive target had been based on the railroad’s outlook in January 2017 and also hinged on hitting certain strategic goals.

Once Harrison arrived at CSX, its board of directors replaced those goals with what it termed an “aggressive” 66.2-percent operating ratio target.

This includes incentives for 2018 and long-term incentives for executives through 2020 that CSX said are “challenging targets to support our pursuit of exceptional returns for our shareholders.”

The ISS resolution on Harrison’s compensation package is non-binding and CSX management has pointed out that a year ago ISS favored the compensation package.

During his short time with CSX before his death, Harrison earned a base salary of $1.8 million last year, plus non-equity incentive plan compensation of $3.4 million, and $600,339 in non-qualified deferred compensation. He also received the one-time reimbursement payment of $29 million.

CSX VP Gets Additional Duties

April 25, 2018

CSX has named Vice President of Mechanical Brian Barr to the role of senior vice president of engineering and mechanical.

Barr will continue to be responsible for the mechanical department while leading the engineering team.

Vice President of Engineering Ricky Johnson will remain in that role and report to Barr, who will report to Executive Vice President of Operations Ed Harris.

Barr joined CSX in 2002 and has served as plant manager in Selkirk, New York; assistant division manager in Atlanta; division manager in Huntington, West Virginia; chief mechanical officer for the Southern Region; and vice president of mechanical.

CSX Names New VP and Controller

March 21, 2018

Angela Williams has been named by CSX as vice president and corporate controller. She succeeds Andrew Glassman, who is leaving the company, but will remain through June 30 to assist the transition period of his successor.

Williams is currently CSX’s assistant controller and has served in various positions in the accounting department since joining the carrier in 2003

She is a certified public accountant and before coming to CSX worked at KPMG LLP and Winn-Dixie Stores.

“Angie’s depth of knowledge of our business and her strong accounting acumen will be invaluable as we continue to build momentum behind our strategy to become the best run railroad in North America,” said CSX Executive Vice President and Chief Financial Officer Frank Lonegro in a statement.

Ex-CSX VP Lands Job at Union Pacific

January 29, 2018

A former CSX high-ranking executive who was forced out of her job as vice president and chief operations officer had handed a VP job with Union Pacific.

Sanborn

Cindy Sanborn, the first woman to hold a senior operating executive role at a Class I railroad,  was among three CSX executives who left the carrier last November during a management shakeup instituted by then-CEO E. Hunter Harrison.

Sanborn will become regional vice president transportation-western region at UP on Feb. 16.

She will replace the retiring Richard Castagna and lead rail operations in Washington, Idaho, Oregon, California, Nevada, Utah, Arizona and New Mexico from a base in Roseville, California.

Sanborn had held various management positions during her 30 years at CSX.

CSX to Require CEOs to Get Annual Exam

January 24, 2018

The board of directors of CSX has decided that henceforth all of its CEOs will have an annual visit with a doctor.

The board will adopt the policy change in the wake of the death of former CEO E. Hunter Harrison last month.

The health of the 72-year-old Harrison had been an issue when he was hired as CEO last spring.

Harrison was known to have health issues and the CSX board at the time insisted that his medical records be reviewed by an independent physician. But Harrison balked, saying that his doctor had cleared him to assume the CEO position.

The CSX board dropped its demand and Harrison took over the C suite at CSX in March.

Harrison died on Dec. 16 two days after taking a medical leave for unspecified health problems.

Railway Age magazine has reported that Harrison suffered from emphysema and it had been widely reported that he used supplemental oxygen.

Federal securities laws do not require companies to disclose executive health problems, but some firms provide that information because it might affect an investor’s decisions to buy or sell stock.

It is not uncommon for companies to be cagey about why their CEOs take medical leave.

United Continental Holdings, the parent company of United Airlines, for example disclosed that its CEO Oscar Munoz had been hospitalized but did not initially reveal in October 2015 that he had suffered a heart attack.

Munoz, who once headed CSX, underwent a transplant and returned to work the following year.

Thomas Flannery, managing partner at the executive search firm Boyden, described the matter of forcing an executive to share his or her medical history with a board of directors as a slippery slope because of privacy concerns. It could have a bigger downside than upside.

He said he encourages executives and their boards to be open about health problems and whether they affect the executive’s ability to fulfill his or her duties.

The CSX board plans to change its policy next month during a meeting, thus avoiding a vote on a resolution that was set to be introduced at the company’s annual meeting.

The policy will require the CEO to get a comprehensive physical performed by a medical provider chosen by the board, according to a letter submitted to the Securities and Exchange Commission that was reviewed by The Wall Street Journal.

A CSX spokesman would not comment on the matter.

The shareholder vote had been proposed by John Fishwick, a Virginia attorney who owns 1,000 shares of CSX stock.

No Turning Back, Foote Says

January 18, 2018

New CSX CEO James M. Foote wanted to make one thing clear. On his watch there will be no turning back from the commitment made to precision scheduled railroading that the late E. Hunter Harrison brought to the carrier last year.

James Foote

During a conference call on Wednesday to discuss the railroad’s fourth quarter financial results, Foote praised Harrison and said CSX would not be where it is today without him.

“I am committed to seeing his vision through and making CSX the best railroad in North America,” Foote said.

Speaking during the same conference call the newly-appointed CSX vice president of operations, Edmond Harris, said the carrier will continue what Harrison started, including operating fewer trains, putting more locomotives into storage, moving the same tonnage with fewer freight cars, and having a more fluid network.

“The table has been set,” Harris said, saying CSX will take advantage of technology and boost the use of distributed motive power.

Foote said he made changes to the sales and marketing structure to simplify the organization by reducing the leadership group to three business units and aligning certain functions into other departments.

He said he also implemented changes in the operating department at the staff and field levels in order to achieve more efficient operation and achieve service improvements.

Foote noted that one of his first moves as CEO was to order the hump to be razed at Tilford Yard in Atlanta.

The yard, which remains open as a flat switching facility, was one of eight hump yards that were converted last year.

As for what the future holds for CSX operations, Harris said that he favors run-through interchange trains and would like to see CSX bypass the Belt Railway of Chicago by running merchandise trains directly to BNSF and Union Pacific.

He will also seek partnerships with short lines railroads and other Class I carriers to create shorter, more efficient routes.

CSX will study creating directional running for longer trains and will continue to build longer trains pulled by fewer locomotives per train.

Foote said CSX will make it a priority to improve its on-time performance, which was just 56 percent in the fourth quarter of 2017.

Calling that unsatisfactory, Foote said CSX plans to create schedule plans for every carload as a way to improve on-time deliveries.

Foote acknowledged that the rapid changes that Harrison ordered at CSX before his death last Dec. 16, disrupted operations, resulting in angry shippers and additional regulatory oversight.

The railroad also lost some traffic, but Foote predicted that most of it will return. “We are seeing some of those customers return already,” Foote said.

However, CSX doesn’t expect to recoup the 7 percent loss it suffered in domestic intermodal business after it closed its Northwest Ohio Intermodal Terminal and ditched the hub and spoke strategy toward building intermodal traffic.

CSX’s intermodal strategy will be built on increasing container traffic to East Coast ports and not on seeking to develop low-volume service lanes.

Capital spending will fall by 20 percent to $1.6 billion in 2018 on top of a 25 percent cut last year.

That prompted some analysts on the conference call to express concern about CSX’s ability to maintain its infrastructure.

In response, Chief Financial Officer Frank Lonegro said CSX will spend $1.4 billion this year on track maintenance, which he said is about the same as it spent in previous years.

Lonegro said most of the curtailed capital spending would have been for new locomotives and freight cars. But with 900 locomotives in storage, and 20,000 cars sidelined, he said it would be many years before CSX needs to buy more rolling stock.

Looking ahead to a March 1 investors conference, CSX executives said they did not want to provide many details about their expectations for this year and beyond other than they expect the operating ratio to improve due to operations improvements and efficiency gains.

However, they did say that CSX expects to reduce its payroll by 2,000 people this year and that it ended 2017 with 3,282 employees than it had on the last day of 2016. CSX now employs 24,000. CSX also reduced the number of consultants that it hired by 1,418.

CSX Names Operations VP

January 9, 2018

A former Canadian National executive has been brought out of retirement to help CSX in its implementation of precision scheduled railroading.

Harris

Edmond L. Harris has been named executive vice president of operations and will oversee mechanical, engineering, transportation and network operations.

Harris, who will begin his position immediately, worked with the late E. Hunter Harrison and current CSX CEO James M. Foote at CN.

He also worked with Harrison at the Illinois Central Railroad where Harrison initially implemented the precision scheduled railroading model.

During his 40 years in the railroad industry, Harris rose to the post of executive vice president of operations at CN.

He later served as chief operations officer at Canadian Pacific and held a seat on the CP board of directors.

Harris also was as a senior adviser to Global Infrastructure Partners, an independent fund that invests in infrastructure assets worldwide; chairman of Omnitrax Rail Network; and board director for Universal Rail Services. He began his railroad career in operations at the IC.

Holding a Bachelor of Science degree in management from the University of Illinois-Chicago,  Harris served in the U.S. Marine Corps from 1969 to 1973.

Foote Named Permanent CSX CEO

December 23, 2017

James M. Foote had the word “acting” removed from his title on Friday after the CSX board of directors unanimously voted to name him the company’s permanent president and chief executive officer.

James Foote

Foote had been named acting CEO on Dec. 14 after E. Hunter Harrison was placed on medical leave. Harrison died two days later.

In a news release, CSX said that Foote will also join the board of directors.

“Jim has decades of railroading experience and the board is confident of his ability to lead the company,” says CSX Chairman Edward J. Kelly III in a statement. “He has already had a markedly positive impact. The board looks forward to working with him.”

Foote said in the same statement that his intends to continue to implement Harrison’s model of precision scheduled railroading, saying that its implementation is well underway, with the most critical components of the implementation completed and beginning to generate measurable operating improvement.

“We look forward to providing an update on our strategic progress and to showcase our deeply talented management team at our upcoming investor day in March,” Foote said.

Before joining CSX last October, Foote was president and CEO of Bright Rail Energy, a technology company formed in 2012 to design, develop, and sell products that allow railroads to switch locomotives to natural gas power.

He previously served as executive vice president of sales and marketing at Canadian National, which he had joined in 1995 as vice president of investor relations to assist the company’s privatization.

Foote began his railroad career in 1972 as a laborer in the mechanical department with the Soo Line Railroad in Superior, Wisconsin.

For nine years, he worked in operating positions with the Soo Line and the Chicago & North Western fulltime while earning his undergraduate and law degrees.

Harrison on Medical Leave From CSX

December 15, 2017

CSX announced Thursday night that CEO E. Hunter Harrison has taken a medical leave of absence and Chief Operating Officer James Foote is serving as acting CEO.

E. Hunter Harrison

The announcement said Harrison is dealing with complications from a recent illness.

A conference call was to be held on Friday morning to discuss the situation.

Harrison has been thought to have health issues for some time. It was reported earlier this year that he sometimes uses supplemental oxygen and that due to an undisclosed illness he has curtailed his traveling.

Concerns about Harrison’s health had been an issue early this year after hedge fund Mantle Ridge acquired a block of CSX stock and pushed for the company to make him CEO.

The CSX board of directors had demanded that Harrison’s medical records be examined by independent physicians, but he declined and the demand was later dropped.

Foote worked with Harrison years ago at Canadian National and was brought to CSX this past October with the idea of eventually succeeding Harrison as CEO of CSX.

“Hunter is a good friend and has been a colleague of mine for many years. He is an icon in the industry and we pray for his speedy recovery,” Foote said in a statement. “I have been following the CSX story very closely since January, but did not realize just how much progress Hunter and CSX’s able team have made replicating the transformation we effected at Canadian National some years ago.”

Harrison agreed to a four-year contract when he agreed to become CEO of CSX.

In his statement, Foote said that the precision scheduled railroading operating model is well in place at CSX and “the company has amassed the critical talent – through education of the internal team and supplementation with a complement of strong PSR operating veterans and a strongly supportive Board – sufficient to follow through and execute on the PSR operating plan.”