Rail-road company CSX has been a top-10 S&P 500 name for the past three years, the dividend has doubled, $3 billion has been set aside for a buyback, and another $1.7 billion has been invested in the company’s long-term growth. On top of all this, CSX offered guidance of 15% to 17% earnings-per-share growth through 2010.
But that hasn’t stopped shareholders from calling for the ouster of CEO Michael Ward. Two activist investor outfits – TCI and 3G – claim they want to change financial strategies as a way to unlock value, despite the fact that CSX is up 247% over the past five years.
“I don’t know how anybody can’t be happy with that,” Ward said of his accomplishments.
Cramer wanted to know why CSX’s shareholders are so vocal about getting rid of Ward, but no one ever cried foul during the troubled tenure of Citigroup’s Chuck Prince.
“I think that the capitalist system is the best wealth-creation engine that mankind has ever devised,” Ward replied, “but we have let some things get awry here.” There’s too much emphasis on the short term, he said, rather than long-term value creation.
If you own CSX stock, “vote in favor of this man,” Cramer said. “This guy’s good.”
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