Report: CSX Transportation close to deal to name Harrison CEO

RELATED TOPICS: EHH | CSX | PEOPLE | CLASS 1 FREIGHT RAILROADS | EAST
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E. Hunter Harrison
Associated Press
JACKSONVILLE, Fla. — Former Canadian Pacific CEO E. Hunter Harrison is close to a deal to become chief executive at CSX Transportation and an announcement could come as early as next week, Bloomberg reported Friday afternoon, citing people familiar with the situation.

Negotiations between CSX and Mantle Ridge, Harrison’s activist investor partner, could still fall apart, Bloomberg reported. But the two sides are reportedly near a deal that would have Harrison start working in Jacksonville right away under a four-year contract.

CSX shareholders would vote on whether to reimburse Mantle Ridge for the $84-million Harrison left on the table when he retired five months early from CP. Harrison announced his retirement on Jan. 18 so that he and Mantle Ridge could pursue a management shake-up at CSX.

CSX declined to comment on the report. A spokeswoman for Mantle Ridge also declined to comment.

CSX officials said in February that they would welcome Harrison as CEO. But the CSX board said it had concerns about the size and structure of Harrison’s proposed $300-million contract as well as Mantle Ridge’s request for six board seats, which would give the fund effective control of the company. The railroad said it would ask shareholders to vote on the matter, at a special meeting that has yet to be scheduled.

Mantle Ridge says the railroad inflated the size of Harrison’s compensation package and mischaracterized the fund’s plan to reshape the CSX board. Mantle Ridge founder Paul Hilal pegs Harrison’s contract at $128 million and says he’s only seeking two board seats: one for himself and Harrison.

The CSX board is under pressure to respond to Mantle Ridge. Investors cheered the prospect that Harrison, who turned around Illinois Central, Canadian National, and CP, would take over in Jacksonville. CSX stock has surged nearly 30 percent since news surfaced that Harrison and Hilal were targeting CSX. And last week the railroad announced that CEO Michael Ward would retire on May 31 — without naming his successor.

CSX has twice moved back a deadline to receive shareholder resolutions, including nominations to its board of directors. The latest deadline is March 10.
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