Harrison requests $300M package
Hunter Harrison is asking for an “exceptionally unusual if not unprecedented” compensation package from CSX Corp. worth an estimated US$300 million, but analysts say shareholders are likely to vote him into the railway’s top job anyway.
Florida-based CSX will ask shareholders to vote on the “extraordinary requests” made by Harrison, the former CEO of Canadian Pacific Railway Ltd., and activist investor Paul Hilal, who owns 4.9 per cent of CSX’s shares through his investment firm, Mantle Ridge LP. Harrison and Hilal have been collaborating to take control of CSX, with Harrison as CEO and Mantle Ridge designating at least six of the railway’s 14 directors. Their requests include an immediate equity award for Harrison of one per cent of CSX’s outstanding shares, at least half of which would not be subject to performance measures of any kind; this is worth approximately US$160 million at present value.
Under the proposal, Harrison would also receive an annual base salary of US$2.2 million, a target bonus of 120 per cent of salary, incentive awards, “extensive benefits and severance protections,” and a house in Jacksonville, Fla. All of this adds up to approximately US$300 million, according to CSX.
Harrison, 72, refused CSX’s request to have an independent physician review his medical records before he’s hired. He was forced to take several weeks off work in 2015 after medical complications.
CSX shareholders will be asked to vote on two separate proposals: the employment package and the governance arrangements, which include giving Mantle Ridge six of 14 board seats and the power to select the compensation and governance committee chairs.
A date for the vote hasn’t been set, but it will be for investors who own shares as of March 16.