CSX extends director deadline
CSX Corp. has extended a director-nomination deadline by two weeks, indicating that the railway is still negotiating with former Canadian Pacific Railway Ltd. chief executive Hunter Harrison.
Harrison, 72, announced last month that he would step down from CP immediately, five months earlier than his planned retirement date, forgoing $118 million in compensation. It soon emerged that activist investor Paul Hilal had teamed up with Harrison to install him in a leadership position at Jacksonville, Fla.-based CSX.
Hilal’s firm, Mantle Ridge LP, has requested several seats on CSX’s board, according to the Wall Street Journal. The deadline to nominate directors was set for Friday, but CSX said its board has voted to extend the deadline to Feb. 24.
“The extension will give our shareholders additional time to nominate candidates for the board of directors and to propose other business for consideration at CSX’s annual meeting,” CSX spokesman Gary Sease said in an email.
The move appears to be buying more time for negotiations, said Citi analyst Christian Wetherbee.
“The issue appears to be the number of board seats the company is willing to concede to Mantle Ridge,” Wetherbee wrote in a note to clients. “Mantle Ridge and Harrison are likely pushing for close to half of the board, while as of late January CSX appears to have offered three seats on an expanded board of (approximately) 14 members.”
Wetherbee said investors have been “very consistent” in their support of Harrison, but a proxy battle is more likely to boost the stock in the short term than a friendly agreement.