CSX Defends Board Against Acitivist Criticism

In reaction to recent criticism from activist investors, CSX Corporation yesterday defended its board, stating that it comprises a broad range of experience and has driven the company's success.

The criticism was surfaced bya group of shareholders formed by the Children’s Investment Fund Management LLP (TCI), and 3G Capital Partners LTD, who own 8.3 percent of CSX’s outstanding shares, and have announced their intent to nominate a minority slate of directors to stand for election at the 2008 Annual Meeting of Shareholders. The group made its formation public in a 13D filing with the Securities and Exchange Commission.

The five nominees, as reported by Thomson Financial, include: Christopher Hohn, founder of TCI; Alexandre Behring, managing director of 3G; Gilbert Lamphere, managing director of Lamphere Capital Management; Timothy O’Toole, managing director of the London Underground; and Gary Wilson, a former director of Walt Disney Co.

“CSX has a strong board of directors with a board range of experience,” the statement reads. “This group of directors has driven the company’s successes, including nearly tripling the stock price in the past three years, and provided shareholders a return better than the rest of the North American rail industry and 89 percent of all S&P companies.

“The board and management team believe that the CSX directors are well qualified to further advance the interests of the company’s shareholders, as well as its employees, customers, and communities. The board also believes the company’s outstanding record of financial, safety and operational improvements demonstrates unequivocally that CSX is a well-run company.”