The Return of the Railroad Robber Baron

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

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 do 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.

That kind of eye-popping compensation puts him alongside the nation’s highest-paid executive, Soon-Shiong of cancer-research firm NantKwest Inc., whose pay tops $300 million. It’s also way more than the $150 million paid to Google’s CEO, Sundar Pichai.

Some more 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, who has been pushing hard to get Harrison approved by the board, see him 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.

Harrison, for his part, has signaled that he’s 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 laid-off workers. At Canadian Pacific, he slashed the workforce — over 17,000 at the start of his CEO tenure — by 34 percent.

Many 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.

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Reposted from OurFuture.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality. He is an associate fellow at the Institute for Policy Studies in Washington, D.C. Last year, he played an active role on the team that generated The Nation magazine special issue on extreme inequality. That issue recently won the 2009 Hillman Prize for magazine journalism. Pizzigati’s latest book, Greed and Good: Understanding and Overcoming the Inequality that Limits Our Lives (Apex Press, 2004), won an “outstanding title” of the year ranking from the American Library Association’s Choice book review journal.

Posted In: Allied Approaches, From Campaign for America's Future

Union Matters

California Protects Precariat Workers

From the AFL-CIO

In a historic win for California’s workers, the California Legislature approved a bill Sept. 13 that makes the misclassification of employees as independent contractors more difficult.

Sponsored by the California Labor Federation, Assembly Bill 5 codifies and expands on a 2018 California Supreme Court decision.

The bill also will help curb the rampant exploitation of workers by unscrupulous employers and give California’s working people the basic rights and protections we all deserve. Gov. Gavin Newsom is expected to sign the bill into law.

 “The time is up for unscrupulous employers who claim their workers are ‘independent’ in order to cut corners on costs,”  California Assembly member Lorena Gonzalez said about A.B. 5

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