CSX names veteran railroad executive to be new CEO in deal with activist investor

Hunter Harrison becomes CSX CEO effective immediately

CSX named E. Hunter Harrison as its new CEO on Monday.

The company said in a statement that Harrison is a "proven railroad executive with a well-regarded track record of producing market-leading operating results." Harrison previously served as CEO of Canadian Pacific Railway.

CSX said it is seeking shareholder input on a proposal to pay Harrison $84 million of the compensation and benefits he forfeited in his separation with Canadian Pacific. In the mean time, CSX said activist "Mantle Ridge agreed to protect Mr. Harrison on an interim basis with respect to this $84 million."

Harrison said he would resign after the 2017 annual meeting if CSX does not provide the reimbursement and tax indemnity requested.

Harrison said in a statement that he is "proud to join the dedicated and talented railroaders at CSX."

"Together, we will implement Precision Scheduled Railroading — a model proven to improve safety, create better service for customers, produce a proud and winning culture for employees, and generate exceptional, lasting value for shareholders," Harrison said.

CSX also said that it has also reached a deal with Mantle Ridge. Five new directors chosen in agreement between CSX and Mantle Ridge were appointed to the company's board as part of the deal.

Mantle Ridge's Paul Hilal said in a statement that this was a "terrific outcome for CSX."

"The Board is united behind a shared goal – creating value for shareholders and all stakeholders by implementing the Precision Scheduled Railroading model at CSX. Together, we have created the conditions for success. Now the real work begins," Hilal said in a statement.

This story is developing. Please check back for further updates.

Watch: CSX, Mantle Ridge deal shapes up

Faber Report: CSX, Mantle Ridge deal shapes up