CSX names Hunter Harrison CEO

Mon Mar 6, 2017 7:11pm EST
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By Michael Flaherty and Aishwarya Venugopal

(Reuters) - CSX Corp (CSX.O: Quote) named veteran railroad executive Hunter Harrison Chief Executive Officer, bowing to pressure from activist investor Mantle Ridge LP.

The railroad company has agreed to sign Harrison, who previously headed Canadian Pacific Railway Ltd (CP.TO: Quote), to a four-year deal, CSX said on Monday.

CSX also agreed to add Harrison and Mantle Ridge founder Paul Hilal to the board, along with three new directors, taking the total size of the board to 13 members.

Mantle Ridge, which owns 4.9 percent of CSX, was pressuring the company to sign Harrison for four years and for Harrison and Hilal to join CSX's board along with four new independent directors.

Harrison, 72, will receive stock options to purchase 9 million CSX shares at its current trading price, the company said.

CSX said its board would also seek a shareholder vote at the 2017 annual meeting on the payment of $84 million in compensation and benefits forfeited by Harrison as a result of his separation from Canadian Pacific.

"Harrison has indicated that he will resign after the meeting if the reimbursement and tax indemnity are not provided," CSX said.

Harrison replaces Michael Ward, who announced his decision to retire as CEO on Feb. 21 after 14 years in the role.   Continued...

FILE PHOTO: CEO Hunter Harrison of CP answers shareholders questions during the company's annual general meeting in Calgary, Alberta, May 14, 2015. REUTERS/Todd Korol