Release Date: May 5, 2004
New York, NY Amalgamated Bank's LongView Collective Investment Funds has filed a proposal at CSX Corporation (stock ticker: CSX) seeking shareholder approval for executive severance agreements that are at least three times annual compensation. Such liberal severance packages are commonly known as "golden parachutes."
The LongView Funds, which currently hold over 90,000 shares of CSX common stock, filed a golden parachutes proposal at this company in 2001, and re-filed this season in light of successes at other rail companies. (In 2002 and 2003 respectively, Norfolk Southern and Union Pacific passed and implemented similar LongView proposals.)
"Often companies justify their excessive severance agreements with the argument that such packages are needed to recruit and retain executives. However, among railroads, the playing field is leveling," said Chief Economist Melissa Moye of Amalgamated Bank's Trust & Investment Group. "CSX would not be disadvantaged in adopting this reform."
The April 24, 2004, S&P stock report stated that CSX lagged behind its peers in terms of revenues, margins, and operational performance over the last three quarters-and reported expectations that CSX would continue to trail peer averages.
In 2002, his final year as CEO, John Snow's total pay was $9.6 million. This was nearly double the median compensation of other railroad chief executives. IRRC reported that CSX's dilution resulting from executive compensation exceeded that of the peer group median for the last two years.
CSX will hold its annual meeting tomorrow morning in Jacksonville, Florida.
Founded in 1923, Amalgamated Bank invests workers' retirement savings through its LongView Funds. With $8 billion in assets under management, LongView actively votes its proxies and sponsors shareholder initiatives for corporate reform. Amalgamated Bank is available online at www.amalgamatedonline.com.
