Posts Tagged ‘E. Hunter Harrison’

CSX Shareholders Sue Over Harrison Hiring

December 22, 2018

Three CSX stockholders have filed a derivative lawsuit against the CSX board of directors alleging they committed misconduct in hiring E. Hunter Harrison.

The lawsuit contends that the board failed to share information about Harrison’s health condition before shareholders voted in 2017 for an $84 million benefits package for Harrison.

The shareholders are John Robertson, James Ekis and George Triefenbach.

Their suit says that under Virginia law, where CSX is incorporated, the shareholders demanded that the board take action and appoint a committee of “disinterested directors” to review the actions of the board.

However, the suit contends that the board of directors shouldn’t be considered to have been disinterested since it decided to investigate themselves.

The lawsuit contends the committee report did not explain what steps it took to ensure it was avoiding conflicts of interest

The board for its part has asked a Florida judge to dismiss the lawsuit because the shareholders don’t have the right to sue. A hearing on that motion has been set for January.

Harrison became CSX CEO on March 7, 2017, but died at age 73 on Dec. 16, 2017.

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CSX Management Change Hinders Efforts to Restore Amtrak Service to the Gulf Coast

June 15, 2017

An Alabama member of the Southern Rail Commission said talks with CSX over getting approval to reinstate Amtrak service along the Gulf Coast have gone back to square one.

Commission member Jerry Gehman of Atmore said that since E. Hunter Harrison became CEO of the railroad last March that management has said that the cost of reinstating the service will be $2.3 billion, take it or leave it.

Gehman said that talks with the railroad facilitated by the Federal Rail Administration had whittled the price tag down to less than $800 million.

But then Harrison took over and “ . . . he is not amenable to our interests,” Gehman said. “Their position was fixed and firm. They said we should go back to the original estimate of $2.3 billion, that they would have no further negotiations, and they walked out of the meeting.”

Gehman said the FRA believes that the price of reviving Amtrak service east of New Orleans should be $117 million.

Now, Gehman said, any chance of seeing the service launched by end of this year is gone.

“We understand CSX’s position; unfortunately, it’s a hostile position, but they’ve made it very clear,” he said. “That hostile position is simply a negotiating tool.”

The Commission plans to continue negotiations. “What I left the [June 9] Rail Commission meeting with was frustration, aggravation and ‘how can I become a better negotiator?’” Gehman said. “My frustration comes from seeing the possibility, not the perspective of the railroad. I would not say that I’m disheartened, but I’m certainly disappointed.”

Gehman said a more aggressive posture on the part of the Rail Commission might be more beneficial.