(Reuters circulated the following story by Scott Malone on May 6.)
BOSTON — Activist investor group The Children’s Investment Fund sent a letter to shareholders of U.S. railroad CSX Corp (CSX.N: Quote, Profile, Research) on Monday urging them to support a minority slate of five directors TCI has nominated to the railroad’s board.
TCI and 3G Capital, which said they together own an 8.7 percent stake in the railroad, have nominated five candidates, who would join a 12-director board. They include the $15 billion London-based fund’s managing partner, Chris Hohn. The slate is rounded out with four other nominees with prior experience as executives or directors at railroads and airlines.
“Today CSX lags its peers on many key operational metrics, while its management and directors continue to award themselves the industry’s highest compensation,” Hohn and Alex Behring, managing director of 3G Capital, another large investor in the railroad, wrote in a letter mailed to shareholders.
CSX in March sued TCI, alleging it has violated U.S. securities laws requiring disclosure of its stockholding agreements. The hedge fund has counter-sued, charging a variety of securities law violations, including illegally enriching corporate directors.