CSX Corporation CSX announced Monday the immediate installation of Hunter Harrison as CEO, but the appointee comes not without conditions.
Having laid out a list of demands, Harrison suggested that he would resign after the annual meeting if the terms were yet unmet. Shareholders must now vote to reimburse Harrison for comp lost from his term as Canadian Pacific Railway Limited (USA) CP’s CEO, provide $84 million in benefits and compensation forfeited during his transition and secure related tax indemnity.
Despite the uncertainty of Harrison’s tenure, UBS anticipates an impending spike in CSX stock driven by his appointment. Considering Harrison’s success as CEO of Canadian Pacific, Canadian National Railway (USA) CNI and Illinois Central, UBS analysts reiterated a Buy rating on shares with a price target of $57.
New Board Composition
In other news, CSX appointed Harrison and four others to the board of directors, and three current directors are expected to step down prior to the 2017 annual meeting. Thirteen (13) members will then comprise the board, with five having been nominated by investment firm Mantle Ridge.
CSX closed down Monday at $49.79. Canadian Pacific closed up at $149.19.
Related Link: Deutsche Bank Upgrades CSX To Buy; Says ‘In Hunter We Trust’
Related Link: Why CSX Isn’t The Only M&A Target In The Rail Space Right Now
__________ Image Credit: By David Wilson from Oak Park, Illinois, USA - 20120730 71 CSX Brunswick, Maryland, CC BY 2.0, via Wikimedia Commons© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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