CSX Corp. and Hunter Harrison have discussed a three-year contract for the railroad veteran to take over as chief executive officer, but the deal has bogged down over details on how to support his plan to turn around the company, according to a person familiar with the situation.
CSX on Friday extended the deadline to nominate directors as it negotiates with activist investor Paul Hilal, who is working with Harrison and seeking six seats on the company’s board, the person said. The two sides continue to negotiate governance issues and there is no guarantee a deal will be reached, said the person, who asked not to be named as details of the talks are private.
Harrison, 72, stepped down as CEO of Canadian Pacific Railway Ltd. last month ahead of schedule, forfeiting $90 million in compensation and reaching a new noncompete accord to free himself to run CSX. In 2012 he teamed with billionaire investor Bill Ackman to take over and turn around the Canadian carrier. Hilal, who was Ackman’s point man for Canadian Pacific, now wants to repeat the feat at Jacksonville, Florida-based CSX.
Harrison is interested only in the chief-executive position at CSX and negotiations partly are focused on who would be chairman, according to another person familiar with the talks. Mike Ward currently holds both jobs and Harrison doesn’t want him to continue as chairman, said the person, who asked not to be named because the discussions are private. At Canadian Pacific and Canadian National Railway Co., Harrison held only the CEO job to focus on day-to-day operations.
Hilal and Harrison’s timing works in their favor. Ward, 66, had been set to retire but agreed in September 2015 to stay on three more years after would-be successor Oscar Munoz left to run United Airlines.
Representatives of Hilal, Harrison and CSX declined to comment on the negotiations.
The deadline for director nominations was delayed to Feb. 24 from the close of business on Friday, the carrier said in a statement. All 12 of the carrier’s directors are up for election at the annual meeting, which typically is held in May.
CSX shares rose 2 cents to close at $47.77 in New York. The shares have climbed 30 percent since Jan. 18, the day before CSX said it was in negotiations with Hilal’s firm, Mantle Ridge. CSX closed at an all-time of $48.60 during the period.