CSX Corp.’s $84 million in payments to recruit Hunter Harrison as CEO made headlines last year, but that was only part of the story of Harrison’s compensation package.
Harrison, who was appointed CEO in March 2017 but died in December, had a package valued at $151 million for fiscal 2017, according to CSX’s annual proxy statement.
The Wall Street Journal reported that would have been the highest CEO pay for any company in the Standard & Poor’s 500 index last year. However, Harrison never actually received that amount.
The package included 9 million stock options with an estimated value of about $116 million. But because of his death, those options were forfeited, the proxy said.
That would have left Harrison with a package of $35 million, which would have still been the 10th highest CEO package, the Journal said. But that also doesn’t tell the full story, because it doesn’t account for the full $84 million paid to reimburse Harrison for money he forfeited by leaving his previous position to pursue the CSX job.
The $84 million was paid in two installments, but only the second payment of $29 million is included as part of Harrison’s CEO pay for 2017. The first $55 million was paid by CSX to hedge fund Mantle Ridge, which backed Harrison in his quest for the CEO position. So, it is not considered a payment by CSX to the chief executive.
If the entire $84 million was counted, it would have brought Harrison’s total compensation package last year to about $90 million. That would have ranked him second behind a $103 million package for Broadcom Inc. CEO Hock Tan, the Journal reported.
Executive compensation can be confusing, because what is listed in public documents includes estimates of the value of some items, such as stock options.
The Daily Record’s chart of pay packages for CEOs of Jacksonville public companies shows the total value of the compensation package, which includes those estimated values.
The chart also separates the executive’s annual salary plus incentive-related cash bonuses, representing money actually paid to the CEO last year.
The change represents the increase or decrease in total compensation package for each executive last year over 2016.
The chart shows the compensation packages at all public companies headquartered in the Jacksonville area for the chief executive officer at the end of the fiscal year. For CSX, that CEO is James Foote, who only served in that position for the last 10 days of 2017 after Harrison’s death.
Besides Foote, John Baker of FRP Holdings Inc. and Peter Hoang of TapImmune Inc. took over as CEO during 2017, so there is no data for change.
In addition to companies based in Jacksonville, the chart includes Ameris Bancorp and GEE Group Inc., which are headquartered out of state but whose CEOs work out of Jacksonville.
Stein Mart Inc., which ended its fiscal year on Feb. 3, is not included because it has not yet filed its annual proxy statement with executive compensation dtaa.
The Wall Street Journal reported the median CEO pay for S&P 500 companies was about $12 million last year. The only Jacksonville CEO at the end of 2017 with pay above that was Gary Norcross of Fidelity National Information Services Inc., or FIS Group, which is an S&P 500 member.
Norcross’s $29 million compensation package included about $12 million in stock and option awards. However, he also received large cash payments under an incentive plan tied to the integration of SunGard Data Services Inc.
FIS executives were rewarded for cost savings achieved after the 2015 acquisition of SunGard.
