If you don’t pay me $300 million, the new CEO at CSX is threatening, I’ll let your workers keep their jobs.
By Sam Pizzigati
Mirror, mirror on the boardroom wall, who’s the greediest CEO of them all? This spring, as always, that’s going to be a tough call. We have so many worthy candidates.
How about, for instance, the outgoing CEO at Coca-Cola? Muhtar Kent will be stepping down as Coke’s chief exec the end of this April. But apparently he needed some extra incentive for his last full year on the job. In 2016, Coke upped his take-home by 20 percent — to $17.6 million.
Not bad for a fellow whose company saw its earnings plunge 11 percent.
And we certainly can’t overlook Bruce Broussard, the chief exec at the heath insurer Humana. In 2016, his pay more than tripled, soaring from $4.8 to $17 million.
What did CEO Broussard to deserve this princely little windfall? Hard to say. We do know that Humana’s pretax income plummeted 36 percent in 2016.
In an ordinary year, CEOs like Kent and Broussard might be frontrunners for any CEO pay dishonors. But we do not live in ordinary times. This year, one grasping top exec has blown away the competition. Meet our Mr. Corporate Greed 2017: Hunter Harrison, the newly hired chief exec at the railroad powerhouse CSX.
The 72-year-old Harrison didn’t come cheap. To take the reins at CSX, he demanded a four-year stock-and-cash pay package that his fans on the CSX board calculated would cost $230 million — and CSX officialdom initially pegged at an even grander $300 million.
Some context: In Harrison’s last gig, running the Canadian Pacific railroad, he pulled down $89 million over the four-year span that ended in 2015. Harrison’s CEO predecessor at CSX made a mere $39.8 million over that same four-year stretch.
Harrison still faces a possible obstacle on the way to his jaw-dropping jackpot. Shareholders will be taking an advisory vote on his pay plan at the CSX annual meeting later this spring. Harrison says he’ll quit if shareholders don’t give him a thumbs up.
That thumbs up, industry observers feel, shouldn’t be much of a problem. Large investors like hedge fund mover and shaker Paul Hilal see Harrison as a railroad man with a magic touch. They credit him for “turning around” the lackluster operation at Canadian Pacific and see no reason why he won’t be able to generate an equally lucrative restart at CSX.
At his previous CEO stop, Harrison cut his workforce by 34 percent.
Harrison, for his part, has signaled that he’ll going to be taking his basic Canadian Pacific gameplan to CSX — and that prospect has the unions that represent 22,000 of CSX’s 27,000-employee workforce much more than slightly apprehensive. Harrison’s previous corporate “success” has come on the backs of cashiered workers.
At Canadian Pacific, Harrison slashed the workforce — over 17,000 at the start of his CEO tenure — by 34 percent.
Business analysts see similarly stunning job losses in store for CSX.
“We expect emphasis now to be placed on cost cutting,” notes Ben Hartford, a transportation expert at Robert W. Baird & Co.
But the new CSX CEO doesn’t rate as a pure one-trick pony. Harrison does have other strategies for cutting costs besides killing jobs. He has a particular fondness for running longer trains. During Harrison’s tenure at Canadian Pacific, the number of cars in an average train bounced up by 25 percent.
So the next time you find yourself twiddling your thumbs at a railroad crossing, waiting for an incredibly long CSX train to rumble by, keep in mind that your wait does serve a definite purpose. You’re helping to make Hunter Harrison the richest railroad executive since America’s original Robber Baron days.
But also keep in mind that you’re only losing time. Thousands of other Americans are likely losing the best job they ever had.
Institute for Policy Studies associate fellow Sam Pizzigati co-edits Inequality.org. His most recent book: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900–1970. Follow him on Twitter @Too_Much_Online.