CSX Corp. (CSX) - Get Report shares fell 1.5% on Monday, Dec. 18, following the sudden death of CEO Hunter Harrison and questions over the fate of the freight company's multi-billion turnaround strategy.
Harrison, 73, had taken a medical leave of absence from the group last week but died Saturday "due to unexpectedly severe complications from a recent illness," the company said in a statement. Calling Harrison a "larger-than-life" figure, CSX Chairman Edward Kelly vowed to "continue to consider in a deliberative way how best to maximize CSX's performance over the long term."
The stock has fallen about 11% since Wednesday, Dec. 13, when news of Harrison's deteriorating health was first reported, but has gained more than 45% so far this year thanks in no small part to his efforts toward cutting costs and simplifying the group's operating structure.
Harrison will be replaced by James Foote, CSX's chief operating officer and chief sales and marketing officer, who worked with Harrison at Canadian National for 11 years.
Harrison was installed as CEO of the Jacksonville, Fla.-based railroad company in April 2017 as part of activist investor Paul Hilal's efforts to shake up management at CSX. Prior to joining CSX, Harrison solidified his legacy at the helm of Canadian Pacific Railway Ltd. (CP) - Get Report for five years.
Harrison's age and overall health were in focus earlier this year as investors were asked to vote on an $84 million compensation package. The Wall Street Journal reported that Harrison has a medical condition that requires him to "frequently use an oxygen tank" and he declined requests by CSX's board to have an independent physician review his medical record during the brief proxy battle. Still, a vast majority of shareholder supported Harrison and rewarded him with the $84 million payment.
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