CSX Part Two

[TheOldDessauer]

From: News 4 Jacksonville

Thousands more CSX workers face layoffs:

Jacksonville-based railroad laid off 4,600 employees last year

By Steve Patrick - News4Jax digital managing editor

The Jacksonville-based company is looking to cut 6,200 jobs over the next three years, the Jacksonville Daily Record reported. This is in addition to the 4,600 jobs cut last year.

Mark Wallace, executive vice president and chief administrative officer, told the company’s Investors and Analyst Conference, "We're a bloated organization."

“We will achieve this principally through attrition,” Wallace told the company’s investor and analyst conference.

Wallace is one of the executives hired in March 2017 after Hunter Harrison was brought in as chief executive officer. Harrison died last year and James Foote took over as CEO of the Fortune 500 company

“We are committed to following through with what he has started,” Foote said.

CSX says it is aiming to have a workforce of only 21,000 employees by the end of 2020.

[TheOldDessauer]

[b]From: Jacksonville Business Journal

CSX in process of selling two Southeast rail lines

By: Will Robinson

April 06, 2018
[/b]

CSX Corp. (NASDAQ: CSX) is in the process of selling more than 175 miles of rail in Georgia and Alabama, records filed with the Surface Transportation Board reveal.

Filings by HGS Railway Holdings Inc. state the Colorado-based company will purchase 121 miles of track in Alabama and 55 miles of track in Georgia from CSX. HGS and CSX are "in the process of entering into a Purchase and Sale Agreement" and expect the transaction "to be consummated on or shortly after the effective date of this notice," according to the documents filed Mar. 29.

CSX Chief Administrative Officer Mark Wallace noted during the railroad's investor day that the company expected to net $300 million dollars from selling surplus real estate and $500 million from selling rail lines over the next three years. Wallace said during the conference that his predecessors had held onto unnecessary assets for far too long.

HGS, which is not a carrier, plans to lease the rail lines to Alabama & Tennessee River Railway in Alabama and Fulton County Railway LLC in Georgia. Neither line will produce revenues above $5 million, according to the filings.

CSX also recently sold its stake in the $77 million Westin Savannah Harbor Golf and Spa.

https://www.bizjournals.com/jacksonvill ... lines.html

[buzz456]

It was not announced what the sale price was for either of these branch lines?

[TheOldDessauer]

CSX Posts Record Financial Performance....wait for it....


https://www.railwayage.com/freight/clas ... me-growth/

[JohnS]

It was not announced what the sale price was for either of these branch lines?

They may announce the selling prices when it's finalized. At the time of the article CSX and the purchaser have entered an "agreement" to purchase. It's like buying a house. They have to wait until closing for the final price.

[TheOldDessauer]

From: Trains Magazine.com

Investor advisory firm questions CSX executive compensation plan

By Bill Stephens | May 9, 2018

JACKSONVILLE, Fla. — CSX Transportation is defending its executive compensation package after an influential shareholder advisory firm recommended that investors reject the plan at the company’s annual meeting on May 18.

The big issue: Compensation for the late CEO E. Hunter Harrison, which shareholders overwhelmingly approved last June.

Although proxy advisory firm Glass Lewis & Co. recommended that shareholders back the CSX compensation plan, Institutional Shareholder Services said investors should reject it.

ISS raised three objections to Harrison’s compensation:
CSX should have imposed a clawback on the unusual $84 million reimbursement agreement with Harrison and Mantle Ridge, the activist hedge fund that brought Harrison to CSX from Canadian Pacific in March 2017. This would have allowed the railroad to recover at least portion of the payment after Harrison’s death.
Harrison’s sign-on stock options should have been completely based on performance.
The operating income target for the management incentive plan should have been higher. It was set below the operating income level CSX reported in 2016.

Companies only rarely lose these say-on-pay votes, which are non-binding resolutions that give investors a voice in how top executives are paid.

But CSX on May 7 urged shareholders to consider the railroad’s improved financial performance, noting that the stock price has increased 53 percent over the past year.

The full-year operating ratio of 66.3 percent was a 3.1-point improvement; adjusted operating income was up $460 million; earnings per share surged 27 percent; and the company returned $2.7 billion to shareholders in the form of dividends and share repurchases.

CSX also rebutted the ISS objections.

The railroad noted that last year ISS recommended that shareholders approve reimbursing Harrison and Mantle Ridge for the salary and benefits that Harrison left on the table by leaving CP five months early.

Harrison had said he would resign if shareholders rejected the reimbursement. Some 93 percent of shareholders approved the reimbursement plan at the annual meeting in June.

CSX noted that Harrison’s stock options were forfeited upon his death in December. In any event, they were evenly split between performance vesting and time vesting over four years, which the railroad said “was not atypical for equity incentives.”

CSX defended the operating income incentive target, noting it was based on the railroad’s outlook in January 2017 and also hinged on hitting certain strategic goals. After Harrison’s arrival, the board replaced those goals with an “aggressive” 66.2-percent operating ratio target.

CSX also noted that its incentives for 2018 and long-term incentives for executives through 2020 “include challenging targets to support our pursuit of exceptional returns for our shareholders.”

Harrison earned a base salary of $1.8 million last year, plus non-equity incentive plan compensation of $3.4 million, and $600,339 in non-qualified deferred compensation. He also received the one-time reimbursement payment of $29 million. Stock option awards worth $115 million were forfeited upon his death in December, according to CSX’s annual proxy statement.

This is not the first time Harrison’s outsized pay has caused a stir.

In 2016, Canadian Pacific shareholders narrowly rejected the railroad’s executive compensation packages due to the pay and perks that Harrison received while serving as chief executive.

In response to investor concerns, CP’s board in 2017 aligned executive pay with long-term performance, made changes to short-term performance measures, limited awards to departing executives, and capped the CEO’s bonus and use of the corporate jet.

The CP board also defended Harrison’s compensation, noting that during his tenure total shareholder return was 192 percent and the company’s value increased by more than $15 billion.

[TheOldDessauer]

From: Trains Newswire

CSX Transportation curtails operations at Cumberland, Md., locomotive shop

By Bill Stephens | May 17, 2018

ACKSONVILLE, Fla. – CSX Transportation has laid off about 100 workers at its locomotive shop in Cumberland, Md., as it reduces the facility from 24-hour operation to one daily shift.

Workers at the former Baltimore & Ohio shop were informed on May 11. The Cumberland Times-News reported that 96 workers and four supervisors were laid off.

CSX would not confirm the number of employees affected, noting that some of them will be eligible to transfer to positions elsewhere on the railroad.

“CSX informed employees last Friday that some positions in Cumberland were being eliminated as part of an ongoing company-wide review of operations to improve efficiency and safety and to better serve customers,” a CSX representative says.

The downsizing of the shop is in line with the reduction in the number of active locomotives in the CSX fleet. At the end of March, CSX reported an active locomotive fleet of 2,900 units, down 863 units from the first-quarter average a year ago. The railroad has 600 units stored serviceable.

Cumberland’s location on the edge of coal-mining country likely didn’t help the shop’s prospects. While coal traffic is up this year, it remains 47 percent below the year-to-date volume of 2011.

Cumberland’s car shop is not affected by the layoffs.

Last year the yard hump was idled at Cumberland, one of eight classification yards systemwide that was converted to flat-switching as part of then-CEO E. Hunter Harrison’s sweeping operational changes.

CSX reduced its workforce 14 percent in 2017, including the elimination of 3,300 employees. The railroad expects to reduce its workforce by around 2,200 positions this year, bringing its headcount to 25,000 by year’s end.

The layoffs are a byproduct of operational efficiency gains at CSX, which is moving the same amount of tonnage on fewer, longer trains.

The strategy has enabled the railroad to use far fewer locomotives and freight cars – and therefore fewer train crews and mechanical forces, Chief Financial Officer Frank Lonegro said at an investor conference this week.

The railroad is halfway to its anticipated workforce reductions this year, Lonegro says.