Posts Tagged ‘CSX management structure’

CSX, Harrison Reach Agreement on CEO Post

March 6, 2017

CSX said Monday afternoon it has reached an agreement to hire E. Hunter Harrison as its CEO effective immediately.

Current CEO Michael Ward, who had announced on Feb. 21 that he would retire on May 31, will become a consultant to CSX.

The railroad also said it has reached a pact with hedge fund Mantle Ridge to reorganize the CSX board of directors.

In a news release, CSX said it would appoint five new directors agreed upon by Mantle Ridge and current CSX management.

They are Paul Hilal, who founded Mantle Ridge, Harrison, Dennis Reilley, Linda Riefler and John Zillmer.

Three incumbent directors will complete their terms at or before the conclusion of the CSX 2017 annual meeting. The CSX board will then have 13 members.

Edward J. Kelly, III, the current presiding director, will become chairman of the board and Hilal will become vice chairman.

Harrison will receive an award of incentive options to purchase nine million shares of CSX stock at its current trading price, eight million of which will be granted as an inducement award under the Nasdaq listing rules, CSX said in its news release.

The options will vest over four years with half of the options vesting based on service and half vesting based on the achievement of designated performance goals over the four-year period.

However, the CSX board will still seek shareholder direction with regard to an $84 million payment to cover compensation and benefits that Harrison forfeited by retiring early from Canadian Pacific.

CSX said that Harrison, 72, has said that his acceptance of the CEO position is subject to CSX ultimately providing this replacement protection initially offered by Mantle Ridge upon his departure from CP.

If he does not receive the reimbursement and tax indemnity that he is seeking, Harrison will resign after the 2017 CSX annual meeting.

CSX said it will ask CSX shareholders to conduct an advisory vote during the annual meeting.

A previously announced special stockholders meeting will not be conducted.

The news that CSX, Harrison and Mantle Ridge has reached an agreement was reported in various news outlets, including the Wall Street Journal, before it was formally announced by CSX.

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CSX, Harrison Reported Close to a Deal

March 4, 2017

News reports on Friday indicated the CSX and E. Hunter Harrison are closed to reaching a deal for the former Canadian Pacific head to become CEO of CSX.

CSX logo 1Bloomberg News reported that an announcement could be made as early as next week although the talks between CSX and hedge fund Mantle Ridge over the composition of the CSX board of directors could still collapse.

The reports indicated the two sides were close to reaching an agreement whereby Harrison would begin work immediately for CSX and receive a four-year contract.

CSX shareholders would vote on whether to reimburse Mantle Ridge the $84 million that it paid Harrison to walk away early from CP.

Back in January, several news reports indicated that Harrison agreed to forego tens of millions of dollars to get CP to grant him a limited waiver of a non-compete clause.

CSX and Mantle Ridge have refused to comment on the report.

CSX Extends Board Nominee Deadline Again

February 24, 2017

CSX has again extended the deadline for nominations of candidates to its board of directors.

CSX logo 1The railroad has been in talks with hedge fund Mantle Ridge about installing E. Hunter Harrison as its CEO as well as the composition of the CSX board.

Mantle Ridge owns slightly less than 5 percent of CSX stock and acquired it with the goal of shaking up CSX management.

CSX earlier said it would hold a special meeting of stockholders to discuss and vote on the Mantle Ridge demands. A date for that meeting has not yet been announced.

Board candidate nominations will now be due on March 10.

Whether it chooses Harrison or someone else, the CSX board will need to find a new CEO because incumbent head Michael Ward said last week that he plans to retire on May 31.

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 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.

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.