CSX CORP

Objectives of CSX’s Executive Compensation Program

The primary objectives of the Company’s executive compensation program are to:

■Attract, motivate and reward executives for extraordinary results that create shareholder value;

■Reinforce a pay-for-performance culture with a significant portion of each NEO’s total compensation at-risk; and

■Implement short and long-term incentive plans with stretch targets that drive strong financial results in achieving sustainable growth, taking into account our business strategy and the expectations of our shareholders.

Alignment with Leading Governance Practices

The Committee has established an executive compensation program that incorporates leading governance practices. Highlighted below are our executive compensation practices that drive performance and support strong corporate governance.

Factors Considered in Determining Executive Compensation

The Committee annually evaluates competitive market data for the NEOs, including base salary and short and long-term incentives, with that of similar positions at general industry companies and peer railroads that are part of an established comparator group for executive compensation purposes (the “Comparator Group”). The Committee considers the following factors, among others, in evaluating target compensation levels:

■Effectiveness in developing and implementing the Company’s business strategy to support financial and operating performance;

■Contribution to the Company’s financial and operating results;

■Individual performance, their role and the NEO’s experience;

■Leadership and the executive’s contribution to creating an employee culture that aligns with transformational business goals and reinforces the Company’s guiding principles, values and behaviors; and

■Nature, scope and level of the executive’s responsibilities internally relative to other executives and externally based on the Comparator Group.

In keeping with past practices, and in consultation with its independent compensation consultant, Pay Governance, LLC, the Committee developed the Comparator Group for 2024, which was comprised of 20 primarily U.S.-based companies and North American railroads, to help shape our executive compensation decisions. The Committee annually assesses and approves the Comparator Group to ensure that it reflects market characteristics comparable to those of the Company, including revenue, assets, net income, market capitalization, number of employees, industry type and business complexity. In addition, the Committee reviews the degree of overlap with peer companies identified by the proxy advisory firms ISS and Glass Lewis.

As a result of its review, the Committee approved the following Comparator Group for 2024 compensation purposes, which did not change from 2023, with CSX’s placement among the Comparator Group in 2024 market capitalization and revenue provided below.

For the 2025 comparator group, the Committee replaced FedEx Corporation, Fortive Corporation and United Parcel Service, Inc. with Dover Corporation, J.B. Hunt Transport Services, Inc. and Otis Worldwide Corporation, as they better align to CSX’s revenue and market capitalization. In general, the annual revenues and current market capitalization of the peer companies fall within half to double of that at CSX.

MARKET CAPITALIZATION AS OF DECEMBER 31, 2024

(in millions)

REVENUE AS OF FISCAL YEAR-END 2024

(in millions)

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Role of the Independent Compensation Consultant

Pursuant to its charter, the Committee has sole authority to select, retain and terminate any consultant used to assist the Committee in fulfilling its duties. The Committee has retained independent compensation consultant, Pay Governance, LLC (the “Consultant”), to provide objective analysis and to assist in the evaluation and development of the Company’s executive compensation program. The Consultant reports directly to the Committee Chair and attends all meetings where the Committee evaluates the overall effectiveness of the executive compensation program and analyzes or approves executive compensation. The Consultant is paid on an hourly fee basis, with such hourly rates approved by the Committee annually.

The Consultant’s Role and Responsibilities■Analyze competitive practices, financial information, total shareholder return and other performance data in relation to the Company’s executive compensation philosophy and program■Review compensation governance practices, including performing an annual risk assessment related to the Company’s executive compensation program■Review performance targets and assess performance against targets for the Company’s short and long-term incentive plans to determine alignment and ensure they drive appropriate behavior■Benchmark executive and director compensation■Assess short and long-term incentive plan design in the context of the Company’s business goals, shareholder value creation, employee engagement and market and governance practices■Provide regular updates to the Committee with respect to current trends and developments in legislative and regulatory activity, executive compensation program design and governance■Assist in the development of the executive compensation comparator group each year■Consult with the Committee Chair to plan and prioritize Committee agenda items

The Committee reviews the performance and independence of the Consultant on an annual basis, at which time it decides whether to renew the Consultant’s annual engagement. Each year, the Committee considers all appropriate information relating to the independence of the Consultant and its professionals involved in the work performed for, and advice provided to, the Committee. In 2024, the Committee determined that: (i) the relationships and work of the Consultant and their professionals did not present any conflict of interest; and (ii) the Consultant and their professionals were independent for the purpose of providing advice to the Committee with respect to matters relating to the compensation of the executives and non-employee directors of the Company.

Compensation Risk Evaluation and Mitigation

The Committee believes an appropriately structured executive compensation program should take into consideration enterprise risk and discourage behavior that leads to inappropriate increases in the Company’s overall risk profile. Accordingly, the Committee, with the help of its Consultant, regularly reviews the Company’s enterprise risks and executive compensation program to consider whether the plans motivate appropriate behaviors and mitigate unnecessary or excessive risk taking.

Each year, the Committee reviews a risk assessment prepared by management and independently by the Consultant that focuses on the structure, key features and risk-mitigating factors included in the Company’s executive compensation program. This risk assessment:

■Describes the process for establishing the Company’s executive compensation program;

■Reviews potential risks and mitigating factors related to the Company’s executive compensation program;

■Analyzes the relationship between the executive compensation program and the Company’s risks identified through the Company’s enterprise risk management process; and

■When appropriate, provides recommendations for potential enhancements to further mitigate executive compensation risks.

The risk assessment, which includes a summary of all executive compensation elements and total rewards, helps the Committee evaluate: (i) the nature of the risks inherent in the Company’s executive compensation program; and (ii) whether the Company has designed and implemented appropriate risk management processes that foster a culture of risk-awareness.

In 2024, this assessment led to a conclusion by management, which was affirmed by the Consultant, that the Company’s executive compensation program was appropriately designed to mitigate compensation risk. As a result, the Committee believes that any risks arising from its executive compensation policies and practices are not likely to have a material adverse effect on the Company.

Executive Compensation Program Features that Serve to Mitigate Risk■Compensation is appropriately balanced between: (i) fixed and variable compensation; and (ii) short and long-term incentives■Significant weighting towards long-term incentive compensation discourages short-term risk taking■Long-term incentive plans utilize performance units, non-qualified stock options and restricted stock units with overlapping vesting periods for outstanding plan cycles■Performance measures for short and long-term incentive awards reinforce the Company’s business goals■Clawback triggers in short and long-term incentive plans based on a financial restatement or behavioral triggers such as dishonesty, fraud, theft or misconduct, beyond those required under SEC and NASDAQ rules■Financial performance measures have a strong correlation to long-term shareholder value creation■Multiple financial performance measures in the short and long-term incentive plans provide a balanced approach and limit specific focus and behaviors to enhance results related to a single metric■Short and long-term incentive awards include maximum payout caps■Internal controls over the measurement and calculation of performance measures protect data integrity■Share ownership guidelines reinforce alignment of executive and shareholder interests

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