Shareholder advisory firms back Harrison reimbursement request

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NEW YORK — Two influential shareholder advisory firms this week recommended that CSX Transportation shareholders vote to approve reimbursing CEO E. Hunter Harrison and his activist investor partner $84 million for salary and benefits Harrison forfeited by leaving early from the top job at Canadian Pacific.

Officials with the proxy advisory firms Institutional Shareholder Services and Glass Lewis said that shareholders would benefit from Harrison’s leadership, according to media reports.

Harrison has said he will quit if shareholders reject the reimbursement request during CSX’s annual meeting on June 5. The Mantle Ridge hedge fund, which helped orchestrate the management shakeup at CSX, is seeking $55 million in reimbursement, while Harrison would receive $29 million.

"The company's failure to make the reimbursement will likely lead to Harrison's exit and the loss of the market value that accompanied his arrival," Institutional Shareholder said in its report, according to Reuters.

CSX shares are up about 40 percent since Jan. 18, when Harrison resigned from CP in order to pursue the CEO role at the Jacksonville, Fla.-based railroad.

Proxy advisory firms monitor corporate governance issues on behalf of institutional investors, such as pension funds and mutual funds. Institutional investors hold more than two-thirds of CSX’s stock.

Wall Street analysts expect investors to approve the reimbursement request.

NEWSWIRETrains News Wire

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