Posts Tagged ‘CSX executives’

Mantle Ridge Disputes CSX News Release

February 18, 2017

Hedge fund Mantle Ridge took issue with some facts contained in a CSX news release issued earlier this week on the subject of E. Hunter Harrison becoming the railroad’s CEO.

CSX logo 3Mantle Ridge head Paul Hilal said he wrote to the CSX Board of Directors to take issue with the news release, in particular the size of the compensation package for Harrison and Milal’s demands for governance changes for the CSX board.

“We owe it to the shareholders to get a deal done promptly. Let’s do it,” Hilal wrote. “If you are willing, we are glad to meet in person and hammer this out this weekend, hopefully delivering good news to the shareholders early next week.”

In the meantime, Harrison told the Wall Street Journal that he was frustrated with what he described as “chest pounding” between his investment partner and CSX, which has resulted in a stalemate in the negotiations for him take over as CSX as its CEO.

The newspaper reported that CSX had offered the CEO post to Harrison, but that Hilal, a principle at Mantle Ridge, has refused to give in on compensation and governance demands. Hilal, who is representing Harrison, has conducted most of the discussions with CSX.

Mantle Ridge holds less than 5 percent of CSX stock but wants to name six directors to the railroad’s board of directors and reduce the number of directors to 12,

In the news release, CSX said it is reluctant to allow a shareholder with such a small share of its stock to dictate the composition of its board. CSX also has described the demands to give Harrison a $300 million compensation package as “extraordinary in scope.”

The Journal said that during a recent meeting with Mantle Ridge, some CSX shareholders objected to the number of seats on the board that Mantle Ridge wants.

Hilal reportedly said during the meeting he needs to control six seats so that Harrison “has control and can execute his plan.”

CSX reportedly is objecting to paying Harrison the $89 million he gave up by leaving early as Canadian Pacific’s CEO in return for receiving a limited waiver of a non-complete clause.

Hilal contends that the compensation deal that Mantle Ridge is seeking from CSX is $200 million and includes $120 million of stock options, about half of which are tied to “very real” performance measures.

Another sticking point is the 72-year-old Harrison’s refusal to agree to have a physical exam by an independent physician.

Harrison told the Journal he was willing to negotiate his pay with the CSX board,

In his letter, Hilal contended that Harrison wants $32 million per year over four years – or $128 million – of which $20 million per year is performance-based.

“His package is worth very little unless he performs spectacularly,” Hilal wrote. As for the changes on the CSX board, Hilal said he is only seeking a seat for himself.

Harrison would occupy another seat along with four other independent directors who would be agreed upon by CSX and Mantle Ridge

“Why are we asking that new directors be added? As we’ve discussed, precision scheduled railroading requires dramatic operational and cultural change,” Hilal wrote. “Change like that starts at the top, with significant new blood on the board not wed to the old ways or legacy decisions and with no ties to any previous strategy or anyone.”

CSX Sets Special Board Meeting on March 16 to Consider Mantle Ridge Proposal to Make Hunter Harrison CEO

February 15, 2017

Hunter Harrison and the Mantle Ridge hedge fund will get their day before the CSX board of directors and shareholders.

CSX logo 1The board on Tuesday agreed to call a special meeting for March 16 at a time and place to be named later to consider the hedge fund’s “extraordinary requests.”

Mantle Ridge has proposed making Harrison the CSX CEO. Harrison last month retired early as head of Canadian Pacific so that he could, presumably, seek the top job at CSX.

Harrison and CP sought unsuccessfully to merge with Norfolk Southern l;ast year but that company’s board rejected the overtures.

In a news release, CSX said Mantle Ridge has acquired less than 5 percent of its stock but is seeking compensation and control far in excess of the scope of its stock ownership.

CSX acknowledged that it has held talks with Harrison and Mantle Ridge during which the hedge fund demanded substantial representation on the CSX Board and that Harrison immediately replace current CSX CEO Michael Ward.

The railroad said it has made several offers to Harrison and Mantle Ridge that would have made Harrison the CSX CEO and given Mantle Ridge three seats on the CSX board.

Mantle Ridge has rejected those offers and countered with its own demands, many of which focus on Harrison’s compensation and the composition of the CSX board.

One noteworthy point made in the CSX news release is that Mantle Ridge has agreed to compensate Harrison for the millions of dollars he agreed to forgo when he retired early from CP. Mantle Ridge wants CSX to make up most or all of that.

Harrison has also rejected a CSX request that he take a physical exam.

CSX said in its statement that it is wary of granting control to a shareholder who holds less than 5 percent of its stock and is demanding benefits from CSX that may exceed $100 million.

CSX said the requested reimbursement and tax indemnity could exceed $300 million and are thus extraordinary in scope and structured largely as an upfront payment and as equity grants that would be payable to Mr. Harrison upon his death or disability with only a portion of the equity grant including any performance metrics.

“The CSX Board is committed to being responsive to the interests of its shareholders and has closely observed the market reaction to Mr. Harrison’s possible employment,” the railroad said in its statement.  “Accordingly, in light of the unusual circumstances surrounding Mantle Ridge’s approach the CSX Board has decided to seek guidance from shareholders on whether CSX should agree to Mr. Harrison’s and Mantle Ridge’s proposals.

CSX said it would schedule its regular board meeting, usually held in May, after the special March meeting.

CSX Extends Deadline for Board Nominees

February 11, 2017

CSX on Friday said it would extend the deadline for nominations to its board of directors.

CSX logo 1The move is being seen as a ploy to give the Mantel Ridge hedge fund more time to negotiate an agreement with the railroad to make E. Hunter Harrison its CEO.

The deadline for board nominees had been Feb. 10 but has been extended to Feb. 24.

Harrison retired early from Canadian Pacific last month and has teamed up with Paul Hilal of Mantle Ridge to seek a management change at CSX.

News reports have said CSX and Harrison have had discussions about that prospect, but the number of seats on the board supported by Mantle Ridge has been a sticking point.

In retiring early from CP, Harrison gave up tens of millions in compensation in exchange for CP giving him a limited waiver of a non-compete clause.

If Harrison is successful in becoming the CEO of CSX, he would replace Michael Ward, who has said he plans to retire by 2019.

CSX Said to be Talking With Harrison

January 31, 2017

The Wall Street Journal reported on Monday that CSX and E. Hunter Harrison are in negotiations about the railroad’s CEO position.

CSX logo 3Harrison has presented to CSX management his plans to revamp CSX. The former CEO of Canadian Pacific, Canadian National and Illinois Central, is teaming up with Paul Hilal of the Mantle Ridge hedge fund to seek a management shakeup at CSX.

Mantle Ridge was reported to be seeking three seats on the 12-seat CSX board of directors, a demand that may be a source of conflict the Journal reported.

News reports indicate that Harrison met with CSX officials last Friday in Atlanta.

If CSX, Harrison and Mantle Ridge are unable to reach an agreement, then the hedge fund has until Feb. 10 to nominate candidates to the CSX board. CSX usually holds its annual meeting in May.

It is not clear what plans that Harrison and Mantle Ridge have for revamping operations at
CSX.

In the past year, CSX management under current CEO Michael Ward has retooled rail operations. Among other steps, CSX has emphasized longer trains and focusing capital expenditures on core routes.

In 2015, Ward said he planned to remain the CSX CEO for three more years after Oscar Munoz, who was expected to replace Ward, left to head United Airlines.

While at CP last year, Harrison unsuccessfully sought a merger with Norfolk Southern.

Some analysts on Wall Street believe CSX will be receptive to having Harrison as CEO because of his experience in leading other class 1 railroads.

CSX Names Rutherford as VP-Industrial Products

November 9, 2016

CSX has named Michael Rutherford as its vice president-industrial products.

CSX logo 1In a news release, CSX said Rutherford will lead sales and marketing activities for the recently-expanded industrial products portfolio, which includes housing and construction materials, forest products, metals, minerals, military equipment and machinery.

Rutherford has served as assistant vice president-industrial products after serving as director of CSX’s “Voice of the Customer” customer insights team and director of marketing in which he helped launch the UMAX interline container program.

Before coming to CSX, he worked at Adidas and Johnson & Johnson. Rutherford holds a bachelor’s degree in economics from Georgetown University and an MBA in International Business from SDA Bocconi University.

CSX Make Changes to Top Management

May 24, 2016

CSX has announced a realignment of its top management ranks that will take effect on July 1.

Cressie Brown, currently vice president of labor relations, will become senior vice president and chief administrative officer. After joining CSX in 1988, Brown held leadership roles in operational and support functions, including technology, finance, service design and customer service.

CSX logo 3 Kathleen Brandt, currently head of the company’s information technology subsidiary, will become senior vice president and chief information officer. She joined CSX in 1985 in information technology.

Zachery Jones has been appointed vice president of labor relations to succeed Brown. He worked at the National Mediation Board before joining CSX in 2010 where he rose to the position of assistant vice president of employee services.

CSX also announced that Lisa Mancinia, the current vice president and chief administrative officer, will retire on July 1.

She joined CSX in 2003 and is a member of CEO Michael Ward’s executive team. Mancinia is responsible for people functions, procurement and real estate.

Both Brown and Brandt will join the executive management team and report directly to Ward.

“These promotions underscore the importance of continuing to develop our highly skilled and committed employees, while accelerating CSX’s next-generation technologies and performance in safety, service and efficiency,” Ward said in a statement.

In other management changes that are effective on June 1, Mike Smith will assume a new role of vice president-PTC and strategic implementation. He is currently vice president-network operations and in his new position will oversee implementation of positive train control and other network-wide initiatives.

Bob Frulla will become vice president-network operations for the northern region. His experience includes time as division manager in several locations and as general manager-network operations.

Smith and Frulla will report to Executive Vice President and chief operating officer Cindy Sanborn.

Jermaine Swafford, who has been managing the southern region, will become vice president-northern region. John Bradley, currently Chicago division manager, will become vice president-southern region. Both will report to Mike Pendergrass, vice president and chief transportation officer. Robert Holtz, assistant division manager in Chicago, will become division manager.

CSX Names 3 to Sales, Marketing Posts

January 14, 2016

CSX announced the appointment of new executives in its sales and marketing operations.

The new appointees are Dean M. Piacente, president-intermodal; Clark Robertson, vice president-chemicals; and Tim McNulty, vice president-Agriculture.

All three executives will; report to Fredrik J. Eliasson, executive vice president and chief sales and marketing officer.

Piacente, who joined CSX in 1987, assumes the intermodal leadership role from his position as vice president-chemicals.

Robertson, who joined CSX in 2010, moves was formerly assistant vice president-regional development.

McNulty, who joined CSX in 1985, will oversee the company’s phosphate and fertilizer market, in addition to shipments of grain and ethanol.

Oscar Munoz Resigns as President of CSX

September 8, 2015

CSX announced on Tuesday that President Oscar Munoz has resigned and will be replaced by Clarence W. Gooden.

Munoz has accepted the position of president of United Continental Holdings, which owns United Airlines.

“We sincerely congratulate Oscar on his appointment to United and the opportunity to lead another outstanding transportation company,” said CSX Chairman and CEO Michael Ward in a statement. “We all thank him for 12 years of dedicated and successful service to CSX.”

Gooden previously served at CSX as executive vice president and chief sales and marketing officer, a post he has held since 2004.

He has more than 40 years of experience in operations and sales and marketing at CSX and other companies.

Other executive appointments announced by CSX included:

Fredrik J. Eliasson is appointed executive vice president and chief sales and marketing officer from his previous position as executive vice president and chief financial officer.

Cindy M. Sanborn is appointed executive vice president and chief operating officer of CSX transportation, inc., from her prior position as executive vice president-operations.

Frank A. Lonegro is appointed executive vice president and chief financial officer from his previous position as vice president-service design.

CSX Makes Top 100 Corporate Citizens List

April 24, 2015

CSX has been named one of the nation’s 100 best corporate citizens for 2015 by Corporate Responsibility Magazine.

The railroad came in at No. 50 on the list. No other railroad was named to the list.

“It’s an honor to be named among leading businesses for our commitment to operating responsibly by doing the right thing in the communities we serve, a job that we take very seriously,” said Michael Ward, CSX chairman and chief executive officer, in a news release. “Freight rail plays a critical role in supporting sustainable business by efficiently moving the things that matter, and creating jobs and economic development.”

The 100 Best Corporate Citizens List measures all Russell 1000 companies based on 303 publicly-available data points in seven categories, including environment, climate, employee relations, human rights, governance, finance, and philanthropy and community support. The ranking is determined on a relative comparison.

CSX also has announced that it has appointed Rodney Oglesby was resident vice president of state government affairs for Philadelphia, New Jersey and New York City.

Oglesby will oversee the company’s interactions with executive and legislative branches, as well as community officials.

Before joining CSX, Oglesby was executive director of government relations for the Philadelphia School District. He also served as chief counsel to Pennsylvania State Sen. Anthony Williams, and held positions at United Way of Southeastern Pennsylvania, General Electric Financial Assurance and Citigroup.

CSX Shuffles Duties of 3 vice presidents

April 12, 2015

CSX has shuffled the assignments among three of its vice presidents. David Baggs will assume the titles of vice president and treasurer in addition to his current title of vice president-capital markets and investor relations.

Baggs’ will assume his additional duties upon the retirement of David Boor, vice president-tax and treasurer.

Baggs will continue to report to Fredrik Eliasson, executive vice president and chief financial officer.

CSX also announced that it has appointed William “Rusty” Russell as vice president-tax and Bryan Rhode as Russell’s successor as vice president-internal audit.

Russell will report to Eliasson, and Rhode will report to Ellen Fitzsimmons, executive vice president-law and public affairs. All of the appointments become effective on July 1. Baggs joined CSX in 1985 and has served in leadership positions in economic analysis, business planning and corporate strategy.

He was among those who designed the company’s financial strategy that incorporates balanced capital investments in critical transportation infrastructure with competitive shareholder returns.

Boor has served CSX for the past 28 years, the last 10 in his current post. Rhode, who will lead the internal audit team, joined CSX in 2014 after serving as secretary of public safety for the Commonwealth of Virginia and as a captain in the U.S. Marine Corps.

He currently serves as CSX’s regional vice president-state government and community affairs, with responsibility for the Mid-Atlantic region. Russell joined CSX in 1996 and has served in senior leadership positions within the finance and internal audit organizations. Previously, Russell was assistant vice president-tax compliance.