Death of CSX CEO raises questions about company's future

E. Hunter Harrison died at 73

JACKSONVILLE, Fla. – The weekend death of CSX CEO E. Hunter Harrison less than a year after he took the railroad's top job has raised questions about what the future holds for Jacksonville's top Fortune 500 company.

CSX shares fell sharply when the company announced Thursday that Harrison was taking an unexpected leave of absence due to a medical condition. By Friday, shares fell 10.3 percent -- a $4 billion market loss, according to The Wall Street Journal. The stock price closed Monday at $53.39 -- a slight rise. 

On Monday at CSX headquarters in downtown Jacksonville, man people had a wait and see attitude. The company's public relations staff declined to let News4Jax inside to talk to executives. But in a statement issued Saturday, CSX said, in part:

"It is with great sadness that we announce that E. Hunter Harrison, President and Chief Executive Officer of CSX, died today in Wellington, Fla., due to unexpectedly severe complications from a recent illness. The entire CSX family mourns this loss."

The statement went on to say, "Hunter was a larger-than-life figure who brought his remarkable passion, experience and energy in railroading to CSX."

Not only do CSX trains carry a lot of freight through Jacksonville, but the company carries a lot of weight in the business circle. It's the largest publicly traded company locally and it's one of Jacksonville's largest employers. In 2011, more than 3,300 of the 21,000 employees nationwide lived in Jacksonville. 

Jane King, the host of "Money Matters" on "The Morning Show," talked about the impact of Harrison's death.

"Top executives, especially disrupters like Harrison, are hard to replace," King said Monday morning.

But Dan Sherman, an Edward Jones analyst who covers the industry, said he is still recommending buying CSX stock. He said other railroad companies that Harrison ran improved after he left.

CSX officials said the 73-year-old Harrison did enough since taking over in March to change the direction of Jacksonville-based railroad, and executives he trained will carry out the plan.

Harrison previously led turnarounds of Canadian Pacific and Canadian National railroads with a tightly scheduled operating model that he refined throughout his career.

At CSX, Harrison changed the way trains are assembled at eight of its 12 rail yards, idled hundreds of locomotives and the railroad eliminated roughly 4,000 jobs.

The changes led to severe service problems over the summer, and three top CSX executives departed last month. But service had been improving.

Since Harrison's death, some are questioning what shareholders should be told about the health of top company officials.

"U.S. Securities and Exchange Commission rule don't require companies to disclose serious health problems in the executive suite," King said.

Apple experienced a similar situation when CEO Steve Jobs was sick.

Disclosure rules for a key executive also must weigh that individual's right to privacy. Lawyers have debated this issue and will continue to do so.

News4Jax checked with JAX Chamber and the mayor's office to see what impact they think Harrison's death will have on Jacksonville. As of early Monday evening, there was still no word from JAX Chamber, but Jacksonville Mayor Lenny Current sent a statement, which reads:

“CSX is a nationally recognized business that has long been a prominent part of the Jacksonville community. I join the CSX family in mourning the loss of CEO Hunter Harrison, and offer my sincerest condolences."


About the Authors:

Jim Piggott is the reporter to count on when it comes to city government and how it will affect the community.