CSX Is Said Near Deal to Name Harrison CEO
CSX Corp. may install Hunter Harrison as chief executive officer as early as the week of March 6 as the railroad and an activist shareholder move closer to ending an impasse over Harrison’s pay package, people familiar with the matter said.
Harrison would start as soon as possible under a four-year contract, said the people, who asked not to be identified because the discussions are private. CSX shareholders would vote later on whether to award Harrison $84 million to cover pay he forfeited when he left Canadian Pacific Railway in January, the people said. The negotiations are fluid and could still fall apart, they said.
Shares of CSX have surged 36% this year, the third-biggest gain on the S&P 500 Index, as investors bet on Harrison’s ability to boost profit at North America’s least efficient railroad. An agreement would give the 72-year-old executive his fourth railroad to run, after stints at CP Railway, Canadian National Railway Co. and Illinois Central.
Directors of CSX earlier welcomed Mantle Ridge’s bid to make Harrison CEO while balking at demands for board representation and a total compensation package the railroad valued at $300 million. Mantle Ridge disputed the valuation.
The CSX board said Feb. 14 that it planned to call a special meeting for shareholders to vote on the proposals, saying the two sides were at an impasse. The date for the meeting wasn’t set, and the board said it wouldn’t make a recommendation on how to vote.
CSX declined to comment. So did Mantle Ridge, an activist fund started by Paul Hilal, a former partner at Bill Ackman’s Pershing Square Capital Management. Pershing ran a successful proxy campaign to instill Harrison as CEO at CP in 2012 before embarking on a turnaround at that railway.