Lone lawyer looks to lock down Hunter Harrison's pay

CSX shareholder and former U.S. attorney, Fishwick, calls proposed $84-million payout 'train robbery' on Facebook page
RELATED TOPICS: CSX | PEOPLE | FINANCIALS | EHH | EAST
Trains Industry Newsletter
Get a weekly roundup of the industry news you need.
By signing up you may also receive occasional reader surveys and special offers from Trains magazine. View our privacy policy.
Fishwick
John P. Fishwick, Jr.
Fishwick and Associates website
ROANOKE, Va. — A lawyer from Roanoke is engaged in a one-man campaign urging CSX Transportation shareholders to vote “no” on a proposal to reimburse CEO E. Hunter Harrison and activist investor Mantle Ridge for the $84 million Harrison forfeited by leaving early from the top job at Canadian Pacific.

John P. Fishwick Jr. — whose father led Norfolk & Western Railway from 1970 to 1981 — calls the reimbursement proposal “a horrific example of corporate waste.” He has written to one of CSX’s major shareholders and has launched a Facebook page, “Stop the CSX Train Robbery,” to promote his cause.

Fishwick, a longtime CSX shareholder, contends that CSX should not have to bear the cost of reimbursing Harrison for work he did at CP.

“A corporation such as CSX should be a much tougher negotiator and not surrender to the demands of an executive to pay his salary for a job which he left voluntarily. This money is not compensation for work Mr. Harrison performed at CSX, but for work which he performed for a competitor of CSX,” Fishwick wrote. “This repulsive level of compensation conveys a poor message to everyone connected to CSX and is particularly demoralizing for current and former CSX employees.”

CSX investors will vote on the matter at the company’s annual meeting of shareholders, which is scheduled for June 5 in Richmond, Va. Harrison says he will resign if investors don’t back the reimbursement resolution.

Mantle Ridge is seeking $55 million, while Harrison is seeking $29 million and asking CSX to pick up the tab for his related tax bill, according to CSX’s draft proxy statement. Harrison had to forfeit salary and benefits in order to be released from his contract at CP.

Harrison announced his departure from CP on Jan. 18, some five months early, so that he and Mantle Ridge could pursue a management shakeup at another Class I railroad. CSX named Harrison its chief executive on March 6.

Wall Street analysts expect that shareholders will approve the non-binding resolution. CSX’s stock price, they note, rose 30 percent amid news that Harrison and Mantle Ridge were targeting CSX.

Paul Hilal, the CEO of Mantle Ridge, says that the reimbursement amounts to less than 12 cents per share. CSX’s stock is trading for around $46 per share, or about $10 per share more than before Harrison announced his resignation from CP. A Mantle Ridge spokeswoman declined to comment on Fishwick’s campaign.

Fishwick questions the need to hire Harrison in the first place.

“Precision railroading is Mr. Harrison’s calling card and it seems to focus on running the trains on time and getting better routes,” Fishwick wrote. “This does not appear to be that unusual a strategy and is not patented. Surely someone else could execute this strategy just as well and far more cheaply.”

Fishwick also raises concerns about CSX paying Harrison’s taxes related to the reimbursement. It is unclear how much this will be, he notes.

Fishwick started his campaign because “the idea of paying such an exorbitant amount...seemed wrong.”

“I’ve never been on Facebook until now,” Fishwick tells Trains News Wire. “I hope it succeeds. I hope that people have an understanding of what their vote means and vote accordingly.”

“I own 6,957 shares,” Fishwick says. “They’re all voting no.”

Fishwick recently returned to private practice after serving as the U.S. Attorney for the Western District of Virginia. The Harvard graduate holds a law degree from Washington and Lee Law School.

NEWSWIRETrains News Wire

  • Previous Day
  • April 13, 2017
  • Next Day
Leave a Comment
Want to leave a comment?
Only registered members of TrainsMag.com are allowed to leave comments. Registration is FREE and only takes a couple minutes.

Login or Register now.
Please keep your feedback on-topic and respectful. Trains staffers reserve the right to edit or delete any comments.
0 COMMENTS
Road to Oblivion

Road to Oblivion

Free download

SEE INSIDE THIS ISSUE

Learn more about the stories and photos in this months issue

Newsletter Sign-Up

By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our privacy policy
Subscribe Up To 54% off the newsstand price!
Subscribe To Trains Mag Today
+