CSX Loses $6 Billion in Value After CEO Harrison Takes Medical Leave
December 15 2017 - 8:51AM
Dow Jones News
By Paul Ziobro and Jacquie McNish
CSX Corp. shares fell 12% early Friday, erasing nearly $6
billion in market value, after Chief Executive Hunter Harrison was
placed on medical leave, highlighting the risk the railroad's board
took when it agreed to hire the 73-year-old railroad veteran
despite the emergence of unspecified medical problems earlier in
the year.
Jim Foote, who was appointed acting CEO by CSX's board on
Thursday, told investors in a call Friday morning that Mr. Harrison
became ill last week after one of his regular multiday pep-talks
with management, known as Hunter Camps. The illness 'led to medical
complications," Mr. Foote said.
Mr. Foote declined to discuss details of Mr. Harrison's
condition, but said "he continues to improve every day." He didn't
say when Mr. Harrison, who has been using an oxygen tank in recent
months and largely working from his home in Wellington, Fla., might
return.
Mr. Harrison's absence leaves an executive team that is
rebuilding after the exodus last month of three senior executives
including chief operating officer Cindy Sanborn. Mr. Foote, who was
recently hired as operating chief, was a marketing executive at
Canadian National Railway Co. when Mr. Harrison led a turnaround of
the Canadian company.
No CSX board members participated in Friday's conference call.
The board was revamped earlier this year after activist investor
Mantle Ridge led a successful campaign to replace five of CSX's
directors and install Mr. Harrison as the company's CEO.
CSX's board initially resisted the change, citing in part
concerns about Mr. Harrison's health, but ultimately reached a deal
with the activist group after CSX shares surged 30% on Mr.
Harrison's potential appointment. The company awarded -- and
investors approved -- Mr. Harrison a four-year contract, which
included an $84 million payment.
Write to Paul Ziobro at Paul.Ziobro@wsj.com and Jacquie McNish
at Jacquie.McNish@wsj.com
(END) Dow Jones Newswires
December 15, 2017 08:36 ET (13:36 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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