CSX CEO, president retire amid Harrison takeover talks

Michael J. Ward and Clarence W. Gooden, chief executive officer and president of CSX, respectively, will retire from the company May 31, 2017, the Jacksonville, Fla.-based Class I railroad said in a statement.    Current CSX Corp. Chief Executive Officer Michael J. Ward and President Clarence W. Gooden will both retire from the company, effective May 31, 2017, the Jacksonville, Fla.-based Class I railroad said in a statement.
   Chief Sales and Marketing Officer Fredrik J. Eliasson has already replaced Gooden (effective Feb. 15, 2017), who will assume the role of vice chairman until his retirement. A 22-year CSX veteran, Eliasson has served as executive vice president and chief sales and marketing officer since September 2015 and prior to that served as CSX’s chief financial officer, from 2012 to 2015.
   Both Ward and Gooden had previously announced their intentions to retire, but the latest news comes amid what have become highly publicized negotiations between CSX and activist investor Paul Hilal’s Mantle Ridge LP to install outgoing Canada Pacific outgoing Canadian Pacific President and CEO E. Hunter Harrison as its next top executive.
   Last month, Harrison stepped down from the CP post, forfeiting millions in benefits and equity awards in the process, and Mantle Ridge purchased a 4.9 percent stake in CSX. The hedge fund then began discussions with the company about installing Harrison as CEO, which seemed to be going smoothly before abruptly hitting a wall last week 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.
   With regard to the negotiations, CSX said in a statement, “The appointment of Mr. Eliasson as President is not intended to preempt or otherwise affect any discussions CSX may continue to have with Mr. Hunter Harrison and Mantle Ridge regarding Mr. Harrison becoming the CEO at CSX.”
   Meanwhile, Jacksonville’s First Coast News is reporting CSX will eliminate about 1,000 management-level positions, starting in late March. The layoffs will include positions both in the field and at company headquarters, and all management positions will be subject to review, according to an email obtained by the local news outlet.
   CSX will provide “enhanced” severance pay, pension benefits and outplacement services to impacted workers, and also plans to implement a voluntary separation program, according to the report.