CSX Corporation (NASDAQ:CSX). has entered into an agreement to pay Hunter Harrrison the new CEO an annual basic salary of $2.2 million. He will also get a target bonus worth $2.8 million which will be guaranteed for the year 2017.

The costly package

There is more to the package; CSX agrees to offer Harrison options worth 9 million shares of the railroad’s stock. He will purchase them at $ 49.79 which is the closing price during his hiring date. The shares price also include $12.91 more than the price of the shares when he declared his interest in CSX. 50% of the options will apply over time while the other half will be relative to performance goals. CSX Corp is listed in the NASDAQ stock under the code CSX.

Decision to fund Harrison early retirement from Canadian

The railroad company is also in the process of agreeing whether to reimburse the $84 million that Harrison had to part with when he went through an early retirement from Canadian Pacific railroad in January. The decision is awaiting shareholders approval during the annual meeting. If approved, the company will pay Harrison $29 million and Mantle Ridge $55 during the coming year and also assume the tax indemnity.

Transition process

The transition process to welcome Harrison to CSX is underway Harrison will take over as the CEO of the Jacksonville based railroad company from Michael Ward. Ward had to vacate the position on Monday, March, 6^th instead of waiting up to May as agreed earlier on. He will however, remain in the company as a consultant until his expiry period at the end of May. Ned Kelly, former presiding director will take over from Ward the chairman position.

More changes expected to occur

Clarence Gooden, former president of CSX, stepped down as the vice chairman of the company and Paul Hilal has been appointed as the new vice chairman. Hilal Mantle Ridge Fund supported fully Harrison’s pursuit for CEO position at the railroad company. O’Toole who has been Conrail’s CEO for over a decade has resigned from the board. Some new directors expected to come on board includes, Dennis Reilley, John Zillmer and Linda Riefler.