(Adds CSX cutting 1,000 management employees, spokesman quotes)
By Allison Lampert
Feb 21 U.S. railroad operator CSX Corp
will cut 1,000 management employees and its chief executive will
retire in May, a company spokesman said on Tuesday, as activist
investor Mantle Ridge LP pushes to shake up the company's board.
Sease said the cuts and the CEO's retirement were long
planned, and not linked to Mantle Ridge, which has a 4.9 percent
stake in CSX, and is pushing the railroad to name Hunter
Harrison, former chief executive officer of Canadian Pacific
Railway Ltd to the top job.
Harrison is considered by industry as a railroad turnaround
expert and CSX stock has risen more than 31 percent since Jan.
18, with investors expecting Mantle Ridge's efforts to lead to
improved company performance.
The Jacksonville-headquartered railroad told workers on
Tuesday that it would cut management employees, who would be let
go by late March, spokesman Gary Sease said in an emailed
response to Reuters.
"While we have been making significant improvements in
efficiency, including more than $400 million in productivity
last year, we know we must accelerate our progress," Sease
CSX's board has called for a special shareholder meeting to
vote on Harrison's proposed pay package, which is estimated to
exceed $300 million, and discuss other demands made by the hedge
Shareholders as of March 16 are eligible to vote in the
special meeting, which has not yet been scheduled.
Sease said, "We are looking at some time in the spring to
hold that meeting."
Chief Executive Officer Michael Ward would retire on May 31
after 14 years in the role, as part of a transition planned for
more than a year, Sease said.
Ward, who is also CSX's chairman, said in 2015 that he would
serve as CEO for at least three more years.
Ward's decision to retire early is a signal that Harrison
will fill the top seat at CSX, said John Risch, legislative
director of the Sheet Metal, Air, Rail and Transportation
Workers (SMART) union.
"The members are concerned," said Risch, director of the
union, which represents the railway's conductors, engineers,
trainmen and yardmasters.
"We think the $300 million is outrageous when you could buy
100 new locomotives which are needed more than Hunter Harrison."
CSX said on Tuesday President Clarence Gooden would also
retire from the company, effective May 31.
Fredrik Eliasson, currently serving as chief sales and
marketing officer, has been named as president.
CSX said Eliasson's appointment was not intended to affect
any discussions with Mantle Ridge.
(Reporting by Allison Lampert in Montreal and Ankit Ajmera in
Bengaluru; Edited by Martina D'Couto, Anil D'Silva and Bernard