CSX board set to adopt proposal on CEO physical exam requirement

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JACKSONVILLE, Fla. – CSX Transportation’s board of directors next month will adopt a rule requiring the railroad’s CEO to undergo an annual physical exam that the board will review.

The move, first reported in The Wall Street Journal, comes a few weeks after the death of CEO E. Hunter Harrison.

Harrison had refused to submit to a company physical or provide his medical records to the board before he was hired in March.

It was later revealed that Harrison had an undisclosed medical condition that required him to use supplemental oxygen. He was placed on medical leave on Dec. 14 and died two days later after suffering unexpected complications from an illness CSX did not disclose.

At least two law firms have said they are investigating whether the board failed to exercise proper due diligence in the hiring process.

Shareholders in June approved paying Harrison and his hedge fund partner, Mantle Ridge, $84 million as reimbursement for salary and benefits Harrison left on the table by leaving early from the top job at Canadian Pacific. The unusual payment also included picking up the tab for Harrison’s related tax bill, valued at up to $23 million.

The new physical rule was a win for John P. Fishwick Jr., a Roanoke, Va., attorney and CSX shareholder who last year waged a one-man Facebook campaign against the $84 million reimbursement proposal.

Last month, after Harrison’s death, Fishwick filed a shareholder resolution with CSX that would require board review of the CEO’s annual physical.

But CSX, in a letter to the Securities and Exchange Commission, said the resolution would not have to be included in its proxy statement because the board would adopt the provision at its meeting on Feb. 7.

“This is an important victory for shareholders,” Fishwick said Tuesday in a video on his Facebook page, Stop the CSX Train Robbery.

Fishwick – whose father led Norfolk & Western Railway from 1970 to 1981 – called the reimbursement proposal “a horrific example of corporate waste.”

A CSX spokesman declined to comment further on the physical rule.

NEWSWIRETrains News Wire

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