After talks between the Class I railway and hedge fund Mantle Ridge to install outgoing Canadian Pacific Chief Executive E. Hunter Harrison seemed to stall out in the past few weeks, negotiators may be nearing a deal, according to Bloomberg.
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After negotiations seemed to stall out in the past few weeks, CSX Corp. may be nearing a deal to install E. Hunter Harrison as its latest chief executive officer, according to a report from Bloomberg news service.
Despite negotiations taking a decidedly hostile tone in the past few weeks, Jacksonville, Fla.-based Class I railroad CSX Corp. may be nearing a deal to install E. Hunter Harrison as its latest chief executive officer, according to a report from Bloomberg news service.
The Bloomberg report cited anonymous sources “familiar the matter” that said an announcement could be coming as early as next week.
CSX said in late February current CEO Michael Ward and President Clarence W. Gooden will both retire from the company on May 31, 2017. Both retirements had been announced previously, but the latest news came amid what has become highly publicized negotiations between CSX and activist investor Paul Hilal’s Mantle Ridge LP to install outgoing Harrison as its next top executive.
Harrison in January stepped down from his position as president and CEO of Canadian Pacific (CP) six months ahead of schedule, forfeiting millions in benefits and equity awards in the process. At the same time, Mantle Ridge purchased a 4.9 percent stake in CSX and began discussions with the company about installing Harrison as CEO, which seemed to be going smoothly before abruptly hitting a wall over issues surrounding an $84 million payment to Harrison to recoup the lost benefits and equity from CP and the number of board seats CSX would grant the fund.
After CSX chose to take the board room battle public, calling a special shareholder meeting to discuss Hilal’s “extraordinary” requests, Mantle Ridge fired back, arguing that the company’s representation of the governance and compensation requests were inaccurate and may have “confused” shareholders.
Under the proposed four-year contract, Harrison would begin “as soon as possible,” and CSX shareholders would not vote on whether to foot the bill for his forfeited equity awards until after the fact, according to Bloomberg’s sources.
And due to the ongoing nature of the negotiations, it’s still entirely possible that the two sides are unable to reach an agreement at all.
Both CSX and Mantle Ridge have declined to comment on the latest rumors.