The board of CSX said Friday it supports the railroad's management and criticized an activist hedge fund that has called for changes at the company.
"The measures of quality for a public company...are shareholder return, financial performance, balance sheet, safety, customer service and governance," the board said in a letter to the fund.
"By any of those measures, the board believes that CSX is an excellent company, and the board unanimously supports the company's strategy and management."
CSX shares are currently trading at 17.16 times estimated 2008 earnings, slightly below the sector average of 17.57. The shares closed at $43.59 Thursday on the New York Stock Exchange. They hit a 52-week high of $51.88 on July 19 and a 52-week low of $33.50 on Jan 10.
The letter to the Children's Investment Master Fund, known by the acronym TCI, came in response to an Oct. 16 letter from the hedge fund calling for a number of management changes, including separating the roles of chairman and chief executive and bringing in directors with more industry experience.
London-based TCI also questioned CSX's management compensation policy and called on the railroad to justify its capital spending plan for the period 2007-2010.
TCI holds 17.8 million CSX shares, a stake of 4.23 percent.