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.

***

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

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work