What is the purpose of the new Long-Term Incentive Program?

The new Long-Term Incentive Program aims to motivate, reward, and retain key CSX employees over a three-year period by linking compensation to the company's financial and strategic performance, specifically the Operating Ratio target for 2013.

How will the Performance Grants be paid out?

Performance Grants will be paid out, if earned, in the form of CSX common stock in early 2014. The payout is contingent on achieving a pre-established Operating Ratio target for fiscal year 2013, which requires significant improvement over prior years. Payouts may also be subject to discretionary downward adjustments for executive officers based on strategic goals.

What were the key outcomes of the CSX Annual Shareholder Meeting?

At the meeting, all thirteen nominated directors were elected to the Board, Ernst & Young LLP was ratified as the independent auditor for 2011, and shareholders provided advisory approval for the compensation of certain executive officers and for holding an annual advisory vote on executive compensation going forward.

Were there any changes to executive employment agreements?

Yes, the employment agreement for David A. Brown was amended. Specifically, his severance entitlement was reduced from two times base salary to one times base salary, and his pension coverage under the final average pay formula was preserved in case his agreement is discontinued before his employment ends.

CSX 8-K: Leadership Changes & Shareholder Matters

Summary

CSX Corporation (CSX) filed an 8-K on May 5, 2011, detailing significant updates related to executive compensation and governance. The company's Compensation Committee approved a new long-term incentive program designed to motivate and retain key employees over a three-year period. This program includes Performance Grants tied to achieving a specific Operating Ratio target by 2013, with payouts in CSX common stock, and Restricted Stock Units (RSUs) that vest over three years. Additionally, CSX held its Annual Meeting of Shareholders, where all thirteen nominated directors were elected to the Board, and the appointment of Ernst & Young LLP as the independent registered public accounting firm was ratified. Shareholder approval was also granted, on an advisory basis, for the compensation of certain executive officers and for holding future advisory votes on executive compensation annually.

Key Highlights

1CSX implemented a new Long-Term Incentive Program (the "Program") for certain employees, comprising Performance Grants and Restricted Stock Units (RSUs).
2Performance Grants are tied to CSX's 2013 Operating Ratio target and will be paid in CSX common stock in early 2014, requiring significant operational improvement.
3RSUs granted to executives vest in May 2014, contingent on a three-year service period.
4Specific Performance Grant and RSU awards were disclosed for named executive officers, including CEO Michael J. Ward.
5David A. Brown's employment agreement was amended to reduce severance pay and preserve pension coverage.
6All thirteen nominated directors were overwhelmingly elected to the Board of Directors at the Annual Shareholder Meeting.
7Shareholders ratified the appointment of Ernst & Young LLP as the independent auditor for 2011 and approved, on an advisory basis, executive compensation and an annual advisory vote on executive compensation.

CSX CORP 8-K Report, Executive Changes (May 5, 2011)

Summary

Key Highlights

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