Posts Tagged ‘railroad executives’

New CSX Executive to be Paid More Than Predecessors

November 3, 2017

The new transportation chief operating officer at CSX will make more base salary than his predecessors.

Trains magazine reported Thursday that James Foote reaped a $400,000 signing bonus and will be paid more than either Chief Operating Officer Cindy Sanborn or Chief Marketing Officer Fredrik Eliasson.

Foote, a former Canadian National executive, will earn a $750,000 annual base salary under the terms of a four-year contract that was disclosed in a CSX regulatory filing earlier this week.

By contrast, the base salary of Eliasson was $600,000, while Sanborn was paid $550,000.

Both CSX executives, who will be leaving the company in mid November, also earned more than $1.3 million in cash-based compensation in 2016, a figure that rises to more than $3.7 million when stock awards are included.

Foote, who formerly worked at CN with CSX CEO E. Hunter Harrison, agreed to a $2 million sign-on equity award, which is half performance-based and half stock options. He will participate in the same incentive bonus plan other CSX executives.

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CSX Management Shakeup Spooks Some Investors

October 27, 2017

The fallout over a CSX executive leadership shakeup has spooked some investors and sent the railroad’s stock price tumbling.

At close of business on Thursday, the CSX price per share had dropped 2.60 percent to $52.92. In after-hours trading, the decline increased to 3.82 percent, to $50.92.

Cowen and Company Managing Director Jason Seidl told Railway Age magazine that his firm has received numerous calls from investors about the changes, which have Chief Marketing Officer Frederick Eliasson, Chief Operating Office Cindy Sanborn, and General Counsel Ellen Fitzsimmons leaving CSX in mid November.

CSX also canceled an Oct. 30 investors meeting that was to have been held in Florida and used as a forum to discuss the railroad’s future operating plans.

“There was no specific reason given for the Investor Day cancellation, but one would have to imagine the sudden departure of CSX’s CMO, COO and general counsel are primary factors,” Seidl said.

At the same time that CSX announced the departures of three top executives, it said it was bringing on board a former Canadian National manager who worked there with CSX CEO E. Hunter Harrison.

James Foote will assume the post of CSX chief operating officer and replace both Sanborn and Eliasson.

Akron Railroad Club member H. Roger Grant told Trains magazine that a management shakeup of the scale of that which occurred at CSX this week is unprecedented in the industry.

“I can’t think of another example of such a sweep of top executives,” said Grant, a professor of history at Clemson University and author of several books about railroads.

The changes will leave only Chief Financial Officer Frank Lonegro from the management team of former CSX CEO Michael Ward.

Siedl said some investors believe there is more going on at CSX than has been disclosed thus far.

“We do not think the departure of these three people, long-tenured executives at the firm, came on completely amicable terms,” he said. “We think their departure could further disenfranchise additional employees, many of which may blame current management for their departures. This would be something the railroad does not need as it attempts to improve its well-publicized service issues. We expect CSX shares to underperform those of its peers in the near-term or until an explanation is given that can assuage investors’ anxieties.”

In a news release announcing the management changes, CSX said that Sanborn and Eliasson were leaving to pursue other opportunities.

That wording is often used by companies to mask a firing or an employee otherwise leaving involuntarily. Fitzsimmons was said to be retiring.

Trains reported that some industry observers were surprised that the management changes were disclosed less than a week before the investor day event and while the railroad remains under scrutiny of the U.S. Surface Transportation Board in the wake of a summer of service disruptions.

Yet others said they were surprised that Harrison, who became CEO in March, waited this long to make major management changes.

The management shakeup mirrors what Harrison did when he became CEO at Canadian Pacific in bringing in executives from Canadian National, where Harrison had also served as the top executive, to oversee the transition to the precision scheduled railroading operating model.

However, Trains reported that at CP changes in top executives occurred over a five-month period and not in a single day.

The magazine said that concerns about Harrison’s health — he has an undisclosed medical condition that limits his travel and forces him to rely on supplemental oxygen — may have had something to do with the timing of the changes.

Harrison had said during a conference call to discuss CSX’s third quarter earnings that the issue of who would succeed him might be addressed during the investor conference in late October.

At CN, Foote was the carrier’s chief sales and marketing officer between 2000 and 2009. He left CN after Claude Mongeau was named to succeed Harrison as CEO.

Foote, who is now president and CEO of Bright Rail Energy, which oversees converting locomotives to be powered by natural gas, does not have railroad operating experience even though Harrison wrote in a memo to CSX employees that Foot “has a proven track record with implementing precision scheduled railroading and  . . . more than 40 years of railroad industry experience.”

One Wall Street analyst told Trains that Foote knows Harrison’s operating philosophy and what’s expected at a Harrison-led railroad.

“Foote could be the trusted, proven railroader that could be a solid backup for Hunter,” said John Larkin, an analyst with Stifel Equity Research. “Just being part of the senior team at CN was kin to accumulating operating experience.”

Yet Trains quoted another source as saying lack of direct operating experience could be a liability.

“Credibility with ops people comes from working day and night in the field,” said the source, who was not named. “If, for example, you haven’t changed a knuckle 50 cars from the head-end in blinding rain at 2 a.m., you won’t have much credibility among the ranks of T&E personnel, superintendents, and trainmasters. These are the people who get trains over the road and want to be led by people who know their daily grind.”

Larkin said Foote might be a short-term successor while CSX grooms Lonegro to be its next CEO if Harrison has to step down or he does not continue after his four-year contract ends.

Foote is not the first former CN manager hired by Harrison at CSX. Approximately 15 people who worked at CN have been hired in operations at CSX.

In return for being released early from his contract at CP, Harrison had to agree not to poach any of that carrier’s top managers.

However, he was able to bring from CP Mark Wallace, who is now CSX’s executive vice president and chief of staff.

NS Names Earhart as Chief Financial Officer

August 20, 2017

Cynthia C. Earhart has been appointed by Norfolk Southern to the post of executive vice president and chief financial officer

Earhart

Earhart, a certified public accountant who joined NS in 1985, will replace Vice President and Controller Thomas E. Hurlbut, who has served as interim CFO since the 2017 retirement of Marta R. Stewart.

Earhart most recently served as executive vice president  and chief information officer. She will retain her information technology responsibilities.

Other positions that Earhart has held at NS include assistant vice president,  vice president of information technology and vice president of human resources.

Prior to working at NS, Earhart was employed as an accountant at Ernst & Young predecessor CPA firm Ernst and Whinney.

She holds a Bachelor of Science degree in accounting from the University of Missouri and has completed the Advanced Management Program at Harvard Business School.

Ex-Conrail Head Named FRA Director

July 12, 2017

A former Conrail executive has been named by President Donald Trump to serve as administrator of the Federal Railroad Administration.

Ronald Batory

Ronald L. Batory has more than 45 years of railroad industry experience and until March 31 served as president and chief operating officer of Consolidated Rail Corporation.

Batory joined Conrail in 1998 as vice president-operations and was appointed COO in 2004.

Previously, he served as president of the Belt Railway of Chicago. His career includes more than 20 years working for eastern and western Class I railroads as well as assisting a court-appointed trustee’s oversight of a regional railroad bankruptcy.

His appointment is subject to Senate confirmation. The FRA is currently without a director although deputy administrator Heath Hall assumed his position on June 23.

Observers Give Their Take on New Amtrak CEO

June 29, 2017

So who is this former airline executive that Amtrak has chosen to take over as its CEO later this year when Charles “Wick” Moorman retires?

Richard Anderson

Richard Anderson was the head of Delta Air Lines, but he also at one time served as a prosecutor and the vice president of an insurance company, United Health.

His father, Hale, worked for the Atchison, Topeka & Santa Fe in Texas and the family moved multiple times as the elder Anderson held office jobs at posts from Galveston to Dallas and Amarillo.

When he was in college, the younger Anderson’s parents died of cancer and he subsequently had to raise his two younger sisters as he worked to earn college tuition money.

After earning his law degree, Anderson worked in Texas for nearly a decade as a prosecutor.

His entry into the airline industry began in the legal department of Houston-based Continental Airlines.

He would later join Northwest Airlines and became its CEO three years later. As Delta Air Lines was emerging from bankruptcy in 2007, its board of directors asked Anderson to become its CEO, which meant that he succeeded Gerald Grinstein, a former CEO of the Burlington Northern Railroad.

“Richard has a hands-on, roll-up-your-sleeves, let-me-see-how-this-thing-really-works kind of approach,” John Dasburg, Northwest’s former president, told USA Today in 2008.

During his time at Delta, Anderson sometimes sought unconventional solutions to solve problems.

For example, in an effort to cut fuel costs, Delta purchased an oil refinery near Philadelphia in 2012.

Industry reaction to Anderson being named co-CEO of Amtrak – Moorman won’t be retiring until late December – has been mostly positive.

He received unqualified endorsements from Linda Bauer Darr, president of the American Short Line and Regional Rail Road Association, and from Ed Hamberger, the president of the Association of American Railroads.

Jim Mathews, head of the National Association of Railroad Passengers lauded Anderson’s transportation experience.

“NARP is very pleased Amtrak is making the sensible move of bringing in an executive with strong management experience in a customer-service oriented transportation company,” Mathews said.

Former NARP executive director Ross Capon said the fact that Moorman will be Amtrak’s co-CEO through December shows the two men will likely have a good working relationship and that Anderson will be able to learn from Moorman.

Not all advocacy groups were enthusiastic about Anderson’s appointment.

Charles Leocha, chairman of Travelers United and an airline consumer advocate, said in an interview with Trains magazine that Anderson is “a real charger” who “has not been a friend of consumers, but ran an efficient airline as consolidation was completed . . .”

Richard Rudolph, the president of the Rail Users Network, said Amtrak needs someone who knows railroads, knows how to run a company and can stand up against Congress and President Donald Trump.

Also expressing skepticism was former Amtrak President and CEO David Gunn.

“If he can’t coax people at Amtrak who know how to run a railroad out of their fox holes, he’s doomed,” Gunn said in an interview with Trains. “And you have to convince them you have a plan that makes sense operationally and is not driven by politics.”

Gunn said the best hope is that Anderson has some knowledge of railroad operations.”

Jackson McQuigg, a railroad historian and passenger advocate based in Atlanta, told Trains that he sees in Anderson a man with a demeanor similar to that of W. Graham Claytor Jr. between 1982 and 1993.

“He had a stellar reputation in Atlanta and cared about the city and its history,” McQuigg told Trains.

While at Delta and Northwest, McQuigg noted, Anderson had a reputation for being a tough guy who wasn’t afraid to mix it up with the airline unions.

“Maybe that bunch in the White House will listen to him,” McQuigg said of Anderson. “It will be interesting to see if that happens or if Anderson presides over dismemberment instead. All I know is that the long-distance trains had better be preserved or the whole thing will go up in political flames.”

Richard Anderson to become Co-CEO on July 12, Wick Moorman Plans to Retire December 31

June 26, 2017

Amtrak will be getting a co-president and CEO next month. Charles “Wick” Moorman will be joined by Richard Anderson, who has 25 years of experience in the airline industry.

This arrangement will continue until Dec. 31, when Moorman plans to step down from his position at Amtrak but continue as an adviser to the company.

The announcement was made in an internal memorandum sent to Amtrak employees and confirmed by a statement issued by Amtrak.

In the memo to employees, Moorman noted that he promised his wife that he time at Amtrak would be short.

Moorman said he said he would stay at Amtrak only as long it took to achieve three goals: Making the company more efficient, developing a stronger safety culture and working with the board of directors to find an executive to lead the railroad long term.

Anderson is a former chief executive at Delta Air Lines and Northwest Airlines, the latter having been acquired by the former.

“Richard has a proven track record of driving growth while enhancing the customer experience,” Moorman said. “What I really admire about Richard is he faces difficult challenges head-on. He has helped companies navigate bankruptcy, a recession, mergers and acquisitions, and 9/11. In total, Richard is a leader with the strategic vision and tactical experience necessary to run a railroad that benefits our partners, our customers and our employees.”

The statement noted that Anderson’s father worked for the Santa Fe.

Anderson, 62, most recently was executive chairman of the Delta Air Lines board of directors after serving as the airline’s CEO from 2007 to 2016. He was executive vice president at United Healthcare from  2004 to 2007 and CEO of Northwest Airlines from 2001 to 2004.

He also served in the legal division at Continental Airlines and was a former county prosecutor.

“It is an honor to join Amtrak at a time when passenger rail service is growing in importance in America. I look forward to working  alongside Amtrak’s dedicated employees to continue the improvements  begun by Wick,” Anderson said in a statement.

Anderson earned a Bachelor of Arts degree at the University of Houston at Clear Lake City and a Juris Doctorate at South Texas College of Law. He is a native of Galveston, Texas.

CSX OKs Money for Harrison, Mantle Ridge

June 21, 2017

It’s now official. CSX CEO E. Hunter Harrison will not lose any money from having retired early from Canadian Pacific in order to pursue the head job at CSX.

The CSX Board of Directors has voted to give Harrison and hedge fund Mantle Ridge the $84 in salary and benefits that Harrison gave up by leaving CP early.

CSX said in a regulatory filing that it will pay Mantle Ridge $55 million and provide Harrison with a lump-sum payment of $29 million. The CSX board also agreed to pay Harrison’s taxes related to the payment.

The reimbursement vote was expected, analysts said, because CSX stock has increased in value since the news broke that Harrison was interested in becoming the railroad’s CEO.

Analysts say the move was a vote of confidence that Harrison will be able to lower the railroad’s operating ratio and increase its profitability, which in turn will bolster the share price of CSX stock.

Harrison joined CSX last March after leaving CP in January.

CSX Shareholders Favor Giving Harrison More $$$

June 6, 2017

As expected, most CSX shareholders have voted to give CEO E. Hunter Harrison the money that he wants.

E. Hunter Harrison

In an advisory vote, 93 percent of the shareholders favored giving Harrison and hedge fund Mantle Ridge $84 million to reimburse them for salary and benefits that Harrison forfeited by leaving early as the CEO of Canadian Pacific last January.

The vote was made public on Monday at the CSX annual meeting in Richmond, Virginia.

Harrison had threatened to resign if shareholders rejected the reimbursement request.

Many analysts had expected the shareholders to agree to giving Harrison the money because CSX stock has risen by 40 percent in value since it became known that Harrison was seeking to become the railroad’s head.

Harrison took over the CEO post last March. Paying Harrison and Mantle Ridge will cost about 12 cents per share.

CSX also said that 13 candidates for its board of directors have been elected, with each member receiving the backing of at least 96 percent of shareholders.

They include Harrison, Mantle Ridge founder Paul Hilal, Donna M. Alvarado, Sen. John B. Breaux, Pamela L. Carter, Steven T. Halverson, Edward J. Kelly III, John D. McPherson, David M. Moffett, Dennis H. Reilley, Linda H. Riefler, J. Steven Whisler, and John J. Zillmer.

G&W Names Hellman Board Chairman

May 31, 2017

John Hellman has been appointed chairman of the board of directors of Genesee &Wyoming.

Hellman is currently the company’s president and CEO and will succeed Mortimer Fuller III, who is retiring.

In a news release, G&W said that Hellmann will continue in his current positions.

He has served on the board since 2006 and succeeded Fuller as CEO in 2007. Hellman served as chief financial officer in 2000 and was named president in 2005.

Fuller had served as board chairman since 1977 and is a great-grandson of Edward Fuller, the founder of the Genesee and Wyoming Railroad in 1899.

G&W said that during its annual meeting held on May 24 that stockholders elected as directors Albert Neupaver, Joseph Pyne, Hunter Smith and Hellmann for terms that expire in 2020.

Directors whose terms on the board continued after the annual meeting are Richard Allert, Hans Michael Norkus, Ann Reese, Richard Bott, Oivind Lorentzen III and Mark Scudder.

Harrison Has Medical Condition That Often Has Him Working From Home, Not CSX Headquarters

May 19, 2017

The Wall Street Journal reported this week that CSX CEO E. Hunter Harrison has a medical condition that often forces him to work at home.

E. Hunter Harrison

The newspaper gave few specific details about the condition and the 72-year-old executive said that he should not be judged by his medical record.

“I’m having a ball and I’m running on so much adrenaline that no one can stop me,” Harrison told the Journal. “Don’t judge me by my medical record, judge me by my performance.”

Harrison acknowledged that he carries a portable oxygen system, but his doctors cleared him for his position.

“There are times when I get a little shortness of breath so I take oxygen and it helps,”
Harrison said.” Sometimes I get a cough and the oxygen makes it go away.”

CSX Chief Financial Officer Frank Lonegro told an investor conference that Harrison is fully engaged in his job.

“We’re really running to play catch up with him,” Lonegro says. “He’s a 24-hour-a-day, seven-day-a-week kind of guy.”

Trains reported that CSX was well aware of Harrison’s medical condition when it hired him.

However, that was a point of contention at one point when CSX demanded that independent physicians review Harrison’s medical records, a request that Harrison refused.

CSX said it would not comment on Harrison’s health.

The Journal said that during his last two years at Canadian Pacific, Harrison frequently worked from home rather than in his CP office in Calgary.