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American ShipperShipping

CSX mulls yearly medical exams for CEOs following Harrison’s death

The board of directors of Jacksonville, Fla.-based Class I railroad CSX will vote Feb. 7 on a resolution that would require its chief executive to receive annual physical examinations, according to shareholder John Fishwick, who proposed the measure.

CSX is expected to adopt a shareholder resolution that would require its CEO to submit the results of an annual medical examination to the board of directors.

   Less than two months after the death of President and Chief Executive Officer E. Hunter Harrison, the board of directors of CSX Corp. is considering a shareholder proposal that would require its CEO to receive yearly medical examinations and submit the results to the board.
   The measure was proposed by CSX shareholder John Fishwick of the law firm Fishwick and Associates in response to Harrison’s passing on Dec. 16, 2017.
   Harrison had only joined the Jacksonville, Fla.-based Class I railroad in March, after which he was spotted using a portable oxygen machine, prompting questions about whether he could handle the physical demands of running a Fortune 500 company.
   In a video posted on Fishwick and Associates’ Facebook page, Fishwick called the resolution “an important victory for shareholders,” citing concerns over an $84 million payout Harrison received from CSX as a stipulation of his employment agreement.
   “Prior to the annual meeting in Richmond, an issue had been raised about Mr. Harrison’s health, and at that meeting, I raised the question of would Mr. Harrison provide the results of his annual physical, which at that time was being paid for by CSX Corporation. Would he provide that to the board of directors?” he said in the video. “That request was not accepted, but I have persevered with that request.
   “In December of [2017], I sent a proposed stockholder resolution to the CSX Corporation, and in that resolution…I asked that the new CEO of CSX undergo a physical and provide the results of that to the board of directors.”
   Fishwick noted that this requirement is fairly common in large businesses, and that he had to similarly submit his medical records upon being appointed by President Barack Obama to serve as U.S. Attorney for the Western District of Virginia, a post he held from December 2015 until January 2017.
   “I sent that resolution in and have heard back from CSX, and I’m pleased to say that I spoke to the general counsel and at their Feb. 7 board meeting, they’re going to approve my resolution,” he said. “I’ve also heard from the outside counsel that they think it’s unnecessary for the shareholders to vote on this because it’s going to be approved by the board of directors.”
   In late December, shortly after Harrison’s death, the CSX board unanimously voted to name James M. Foote as the company’s new president and chief executive officer.
   Foote, who is 63 years old, worked closely with Harrison during their time at Canadian National Railway and is expected to continue transitioning CSX to Harrison’s “precision scheduled railroading” (PSR) operating model, which at its core is about moving the same amount of cargo with fewer trains, equipment and personnel.
   CSX did not respond to a request for comment on the shareholder proposal.

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