(The following story by John D. Boyd appeared on the Traffic World website on September 25.)
WASHINGTON, D.C. — After waging a long, bitter fight against dissident investors led by two activist hedge funds, CSX this week finally concluded its June 25 shareholders election that put four minority directors on its 12-person board.
CSX had waited to conclude the annual board meeting and election until after an appeals court ruled on its challenge to some shares used to elect two of those dissidents.
But CSX lost the appeal, invited the two remaining minority directors to take office and officially concluded the election on Sept. 24.
Christopher Hohn, managing partner of The Children’s Investment Fund Management, and former Conrail CEO Timothy O’Toole technically joined the board two days earlier.
They joined two other directors who had already taken their board seats out of the five-person slate the dissidents had nominated. Those were Alexandre Behring, managing director of 3G Capital Partners and a former Brazilian railroad CEO, and Gilbert H. Lamphere, who once headed the board of Illinois Central Railroad.
They had won their seats by margins that were beyond challenge, while the fifth nominee failed to win enough votes.
CSX Chairman, President and CEO Michael Ward told CNBC television’s “Mad Money” program this week that the new board members were going through orientations and reviewing internal CSX studies on the company’s direction.
“Our first board meeting is not until late October, but we are welcoming them and listening to their ideas and see if there are ways we can get even better.”
So far, CSX has not announced the committee assignments for either the four minority directors or a fifth new member who was nominated by the company.
CSX this week also said the recent hurricanes and other storms that battered its lines would cut third-quarter operating income by $40-$50 million, “primarily related to asset write downs, business interruption and reroute expenses.”
A big part of that is for line repairs around New Orleans, where Hurricane Gustav on Sept. 1 knocked out 21 miles of track and then Ike on Sept. 13 undid the repairs already under way and caused more damage.