CSX CORP
For the period ended May 7, 2025. Filed Mar 25, 2025.
View on SEC.govAbout this filing
What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 7, 2025 · Filed Mar 25, 2025
Contents
Proxy Voting Summary
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all the information that you should consider, and you should read the entire Proxy Statement carefully before voting. For more complete information regarding the Company’s 2024 performance, please review the 2024 Annual Report.
| ITEM1 | Election of DirectorsAs discussed in more detail in the “Corporate Governance” section below beginning on page 19 of this Proxy Statement. |
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| The Board unanimously recommends a vote FOR the election of the following director nominees. | |
COLLECTIVE KEY SKILLS AND EXPERIENCES OF THE DIRECTOR NOMINEES
| 2025 Proxy Statement | 14 |
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Proxy Voting Summary | Shareholder Engagement Highlights
Shareholder Engagement Highlights
We conduct and facilitate significant shareholder outreach and engagement throughout the year to ensure that the Board of Directors and management proactively understand and consider our shareholders’ views on important issues and are able to elaborate on our initiatives and engage in constructive dialogue with our shareholders. Below is a summary of the design, breadth and key areas of focus of our 2024-2025 shareholder outreach and engagement efforts. Our continued regular, robust and proactive engagement with our shareholders is reflective of the intrinsic value that we place on shareholder feedback and our ongoing commitment to—and responsiveness to our shareholders’ requests for—transparency in our decision-making.
Comprehensive detail on our 2024-2025 shareholder outreach and engagement efforts and our policies and practices regarding shareholder engagement generally—including our other mechanisms for receiving feedback from and engaging with our shareholders—is provided in the “Shareholder Engagement” subsection of the “Corporate Governance” section below beginning on page 50 of this Proxy Statement. We encourage you to review this subsection for a more fulsome perspective on our shareholder outreach and engagement program.
| Outreach and Engagement Design Overview | CSX Participants |
|---|---|
| ■Governance and Sustainability Committee Chair■Compensation and Talent Management Committee Chair■Chief Legal Officer | ■Head of Investor Relations and Strategy■Leaders from different CSX departments, such as legal, total rewards, sustainability and safety |
| Through our outreach efforts before the 2024 Annual Meeting, we contacted the governance teams of 19 key shareholders representing approximately 41% of outstanding shares.* We received a meeting declination (generally due to investors having no concerns) or met with the governance teams of 13 of these shareholders representing approximately 36% of outstanding shares.Through our off-season outreach efforts after the 2024 Annual Meeting, we contacted the governance teams of 18 of our largest shareholders representing approximately 44% of outstanding shares. We received feedback from or met with the governance teams of 12 of these shareholders representing approximately 39% of outstanding shares.* | |
| Areas of Focus | |
| ■Board oversight of risk and strategy, including of safety■Executive compensation■Director commitments■Board composition, refreshment and diversity | ■Safety■ONE CSX culture■Leadership transitions■Environmental and sustainability initiatives |
- Based on ownership as of March 31, 2024 for outreach before the 2024 Annual Meeting and as of September 30, 2024 for off-season outreach.
| ITEM2 | Ratification of Independent Registered Public Accounting FirmAs discussed in more detail in the “Audit Matters” section below beginning on page 59 of this Proxy Statement. |
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| The Board unanimously recommends that the shareholders vote FOR this proposal. | |
| ITEM3 | Advisory (Non-Binding) Vote to Approve the Compensation of CSX’s Named Executive OfficersAs discussed in more detail in the “Executive Compensation” section below beginning on page 63 of this Proxy Statement. |
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| The Board unanimously recommends that the shareholders vote FOR this proposal. | |
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Executive Compensation Highlights
Alignment with Leading Governance Practices
The Compensation and Talent Management Committee has established an executive compensation program that incorporates leading governance principles, such as those highlighted below, which drive performance and support strong corporate governance.
| CSX Executive Compensation Practices Include: | CSX Executive Compensation Practices Do NOT Include/Allow: | ||
| ■Significant percentage of executive compensation that is performance based■Performance measures with stretch targets that are highly correlated to shareholder value creation■Short-term incentive compensation plan that contains financial, safety, operational and environmental goals■Inclusion of multiple financial measures in short and long-term incentive plans■Robust performance management and goal setting processes for the CEO and executive leadership■Engagement of an independent compensation consultant to review our executive compensation program and perform an annual risk assessment■Significant share ownership requirements for the CEO and executive leadership and non-employee directors■Double trigger in change-of-control agreements for severance payouts (i.e., change of control plus termination)■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■Use of payout caps on short and long-term incentives■Annual “Say-on-Pay” vote | ■Re-pricing of underwater options without shareholder approval■Excise tax gross-ups■Recycling of shares withheld for taxes or exercise price■Hedging or pledging of CSX common stock■Vesting of equity awards with less than a one-year period■Encouraging unreasonable risk taking |
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2024 Components of Compensation
CEO TARGET COMPENSATION
ALL OTHER NEOS AVERAGE
TARGET COMPENSATION
| Salary | Cash-based Short-term Incentives | Performance Units |
| Non-qualified Stock Options | Restricted Stock Units |
| 2025 Proxy Statement | 16 |
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Overview of Incentive Payouts
The following tables demonstrate the Company’s 2024 performance outcomes against each performance goal and the overall amounts that would have been earned based solely on such outcomes. As described further below under “Recovery of Erroneously Awarded Compensation,” in order to satisfy its recoupment obligations under the CSX Clawback Policy following its 2024 “little r” financial restatement, the Company reduced the amounts that would have otherwise been earned by its covered executives under the 2024 MICP and 2022-2024 LTIP by an amount equal to the amount of erroneously awarded compensation that was paid to such covered executives. The amounts presented in the tables below reflect the amounts that would have been earned before the Compensation and Talent Management Committee’s reduction of the payouts to satisfy its obligations to recover the recoupment amount from the covered executives, which are described further under “Recovery of Erroneously Awarded Compensation.”
| 2024 MICPPerformance Measures(1) · Threshold(1)(0%-50% payout) · Target(100% payout) · Maximum(200% payout) · Individual Measure Payouts · Total Achievement Level | |
|---|---|
| Financial Goals – 70% weighting | Adjusted:82%(5)Unadjusted:61%(5) |
| Operating Income(30% weighting) | Adjusted:21%Unadjusted:17% |
| Operating Margin(2)(30% weighting) | Adjusted:17%Unadjusted:0% |
| Initiative-basedRevenue Growth(3)(10% weighting) | 20% |
| Safety, Operational and Environmental Goals(4) – 30% weighting | |
| FRA PersonalInjury Rate(5% weighting) | 0% |
| FRA TrainAccident Rate(5% weighting) | 0% |
| Trip Plan Compliance(10% weighting) | 7% |
| Fuel Efficiency(10% weighting) | 17% |
(1)Performance measure payouts are determined independently and each measure could result in a threshold payout range from 0% to 50% as shown, where applicable, in the table.
(2)Like prior plan years, the 2024 MICP allowed a formulaic adjustment to the operating margin performance goal by a predetermined amount if the average cost of highway diesel fuel was outside the range of $4.00 to $4.50 per gallon. This adjustment is designed to account for the potential impact that volatile fuel prices have on expenses and operating margin. Because the 2024 average price per gallon was $3.76 for highway diesel fuel, which was below the range, there was an adjustment to the operating margin goal, which increased by 20 basis points.
(3)Initiative-based Revenue Growth is a non-GAAP measure calculated by the amount of newly generated line-haul revenue associated with specific customer initiatives in the year. Line-haul revenue is the revenue generated from moving traffic, excluding fuel surcharge, before any costs or expenses are deducted.
(4)Certain safety actuals and operations performance can continue to settle over time. The Company’s 2024 achievements demonstrated in this table reflect actuals as of around the time the Compensation and Talent Management Committee approved the overall resulted payout in early 2025. These metrics were not impacted by the 2024 MICP Adjustment.
(5)For 2024, the Compensation and Talent Management Committee approved an adjustment to the operating income and operating margin metrics in order to exclude the $108 million one-time non-cash goodwill impairment charge related to the Company’s Quality Carriers investment, which was an unusual special item for 2024. Had this adjustment not been made, the aggregate achievement level would have been 61% of target. No individual performance adjustments were applied to 2024 payouts for any NEO. See “Short-Term Incentive Compensation” below for additional detail regarding this adjustment.
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| 2022-2024 LTIPPerformance Measures · Threshold(0% payout) · Target(50% payout) · Maximum(100% payout) · Individual Measure Payouts · Total Achievement Level | ||
|---|---|---|
| Average Annual OperatingIncome Growth Rate(50% weighting) | Adjusted:27%Unadjusted:0% | Adjusted:57% of Target(2)Unadjusted:37% of Target(2) |
| Economic Profit(1)(50% weighting) | Based on prior year’s Economic Profit with the payout percent averaged over three years;Recommended performance range of 5.3% of GCE for each year ($302M for 2022) | 49% |
| Relative TSR (Modifier) | 0.75% | |
(1)Economic Profit is a non-GAAP measure designed to measure whether returns on new investments exceed an expected rate of return and to encourage investments in profitable growth projects. Improvement in Economic Profit has historically had a strong relationship to stock price appreciation.
(2)For this cycle, the Compensation and Talent Management Committee approved an adjustment to the average annual operating income growth rate metric in order to exclude the $108 million one-time non-cash goodwill impairment charge related to the Company’s Quality Carriers investment, which was an unusual special item for 2024. Had this adjustment not been made, the aggregate achievement level of the performance metrics would have been 37% for the NEOs. See “Long-Term Incentive Compensation” below for additional detail regarding this adjustment.
| 2025 Proxy Statement | 18 |
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