CSX Board to Require CEOs to Get Annual Physical Exam -- Update
January 23 2018 - 11:49AM
Dow Jones News
By Paul Ziobro
CSX Corp. will require the railroad's chief executive to submit
to an annual physical exam that will be reviewed by the board,
adopting the policy months after the death of prior CEO Hunter
Harrison following unspecified health issues.
The board has agreed to adopt the policy at its upcoming meeting
on Feb. 7, according to a letter submitted to the Securities and
Exchange Commission reviewed by The Wall Street Journal. The
resolution will require a comprehensive physical performed by a
medical provider chosen by board.
The railroad's board was under fire last year after it agreed to
hire Mr. Harrison without getting a physical exam or access to his
medical records, despite concerns about his health. A CSX spokesman
declined to comment.
The move will avoid a shareholder vote on a similar policy that
had been proposed by an individual CSX investor for the company's
next annual meeting. "This is an important victory for
shareholders," said John Fishwick, a Virginia attorney who
submitted the proposal, in a video posted on Facebook. Mr. Fishwick
owns 1,000 CSX shares.
The rule comes after a year where Mr. Harrison's health had
overshadowed his attempt to turnaround the railroad operator. Mr.
Harrison was named CEO last March following a brief battle with an
activist shareholder who wanted the veteran railroader to implement
a new operating plan at CSX modeled after prior turnaround he
executed at two major Canadian railways.
Mr. Harrison, who was 72 when he was named CEO, had a history of
past health issues and required the use of a portable oxygen tank
to treat an unspecified medical condition. He declined to submit to
an annual physical as part of being named CEO. His hiring included
an $84 million payment to Mr. Harrison to cover compensation he
left behind when he quit his job at another railroad to lead
CSX.
Mr. Harrison moved quickly to change CSX, idling hundreds of
locomotives, closing several yards and overhauling train schedules,
which caused delays during much of the summer. The railway has
since recovered, although the company is still working to win back
customers lost last year.
Mr. Harrison died in December, two days after taking a medical
leave of absence. Jim Foote, who was hired as Mr. Harrison's No. 2
in October as three other seniors were leaving, was named permanent
CEO shortly after Mr. Harrison's death.
Mr. Foote this month acknowledged that the rapid pace that Mr.
Harrison made changes at CSX were broadly disruptive to the
railroad's operations. The company has since hired another
operations executive to work under Mr. Foote and broadened its
senior management team with leaders to help carry out the remaining
phase of the turnaround.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
January 23, 2018 12:34 ET (17:34 GMT)
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