CSX President and CEO Joe Hinrichs, Railway Age’s 2025 Railroader of the Year, has been suddenly and unexpectedly railroaded by his own collectively myopic Board of Directors, and for no reason other than, sooner or later, refusing to join the transcon merger fray. I’m not the only one who wholeheartedly agrees with CNBC’s Jim Cramer that there has been an “injustice in Jacksonville” based on short-sightedness and hedge fund pressure. Call me naïve, but I didn’t see it coming. Nor did many others.
Sept. 26 marked Joe’s third anniversary with CSX. “Three years ago, I said we would work to improve customer service and the employee experience while maintaining an industry-leading operating model,” he said in a LinkedIn post. “Fast forward to today and I believe the ONE CSX team has made dramatic progress on all these fronts. The progress that the operating team has made back to industry-leading operating metrics since early May, combined with the finishing of two major capital projects (Blue Ridge Subdivision and Howard Street Tunnel), is testament to what we can do when we work together. The dramatic movement in employee and customer Net Promoter Scores at the same time shows the power of teamwork and positive leadership. Thank you to all 23,000 members of the ONE CSX team for all your support these last three years.”
Normally, I would exercise my editorial prerogative and change the word “last” to “past,” since the former implies a sense of finality. Here, however, “last” is sadly appropriate.
Joe’s departure will shake CSX to its core, beginning with the agreement employees. “Several of your boots-on-the-ground employees are friends of mine and they all say the same thing—CSX is better off as a railroad and a place to work,” remarked Heritage Railroad Social Media Director D. Alex Wood. “The industry needed your positive attitude and eager energy. Here’s to many more years for you in our great railroad story!”
From consultant Rick Gould, President of Rail Easy Logistics Inc. (and a former CSX employee): “I have been in this industry for 52 years and have never seen better employee/management relationships.”
From former CSX CEO Clarence Gooden: “You’ve done a great job, especially with the headwinds you’ve faced.”
From Railway Age Capitol Hill Contributing Editor Frank N. Wilner, a former rail labor official: “In fewer than three years, Joe Hinrichs revolutionized six decades of railroad labor relations. As Hunter Harrison creatively destroyed hidebound ways of building and dispatching trains with Precision Scheduled Railroading, Hinrichs proved labor agreements can more efficiently and more quickly be negotiated on the ballast most familiar to general chairpersons, rather than through cumbersome national handling but still preserving essential wage and benefits patterns. That is quite a legacy for a short-timer who, though he was a major railroad customer at Ford for many years, came to the job with no railroad background.”
Of course, there are those taking the opportunity to gloat, like activist investor Ancora, which couldn’t care less about the rail industry and is pushing further consolidation. I won’t pollute Railway Age by publishing its arrogance. Prendi il tuo avido fondo speculativo e mettilo dove non splende il sole.
Joe’s replacement is an Angel—literally—and according to the company’s press release on his appointment, figuratively. CSX describes Steve Angel, 70, as “an accomplished executive with more than 45 years of experience leading large, public companies and generating strong shareholder returns. He has a long and proven track record of leading high-performing teams, fostering a collaborative culture, and driving operational excellence and growth, while maintaining disciplined capital allocation and attractive returns on capital … He is a visionary in creating long-term value and an expert in guiding companies through significant transformation. The Board is laser-focused on advancing CSX’s strategic priorities and maximizing shareholder value, and we are confident Steve has the right skillset, expertise, and background to help us deliver our next phase of growth … During Angel’s long career as CEO of Linde plc, and its predecessor Praxair, Inc., companies under his leadership have created significant and sustained shareholder value. During Angel’s tenures, Linde and Praxair generated total shareholder returns of 219% and 257%, respectively. Since the combination of Linde AG and Praxair, the company’s market capitalization has grown by 141%, a $131 billion increase in value, outperforming the S5MATR Index and creating the world’s largest industrial gases and engineering company. Angel was CEO of Praxair from 2007-2018. After its merger with Linde in 2018, he became CEO of the combined company until 2022, when he was named Chair. He plans to retire from Linde’s Board in January 2026. He began his career at General Electric where he held a variety of management positions for more than 22 years and worked directly with locomotive and rail operations.”
As expected, there was the usual corporate-speak platitude: “[The Board] wants to sincerely thank Joe for his leadership over the past three years. We appreciate his service and his many contributions to CSX. His dedication to strengthening our operations and investing in our people and culture has laid a strong foundation as we enter this exciting next chapter.”
“The language in the CSX’s press release suggests a board-driven decision, possibly reflecting a shift in strategic direction or leadership style,” a major rail supplier commented to me. “Joe may have been brought in to stabilize operations post-PSR and improve CSX’s culture. Steve Angel’s appointment may signal a pivot toward more aggressive transformation such as a consolidation/merger.”
Bingo!
Observes our Wall Street Contributing Editor Jason Seidl: “Mr. Angel is an unknown commodity in the space but has a proven value creation and business integration track record. We expect his first communications with investors to be in October for 3Q earnings. CSX may not be done with moves as Mr. Angel and the Board may want to bring other management into the mix at various levels. It should be noted that Mr. Angel oversaw and led the integration of Praxair and Linde to create one the largest industrial gasses companies. This was a multi-year $50 billion-plus transaction that targeted more than $1 billion in synergies. The incoming CEO may position CSX more strategically, though don’t expect this to suggest any near-term deal activity. We view this change in leadership, which caught some by surprise, as a way for CSX to clean the slate and focus on core operations and culture. We do not believe the transition has anything to do with the short-term operations, and CSX reiterated its volume guidance.”
Most railroaders know very little about Angel, beyond that he is highly skilled at merging large companies and worked for General Electric’s locomotive business unit many years ago. According to CSX’s Sept. 26, 2025 SEC 8-K filing, Angel, when CEO of industrial gases company Linde AG from 2018 to 2022, “oversaw the successful integration of Linde AG and Praxair, Inc., which created the world’s largest industrial gases and engineering company.” Prior to its merger with Linde, Angel served as Praxair Chairman, President and CEO from 2007 to 2018, “helping guide Praxair through significant transformation while identifying and pursuing strategic growth initiatives.”
Though not specifically mentioned in the 8-K, Angel’s CSX compensation package is directly tied to his successfully executing a merger with another Class I to form a U.S. transcontinental, provided the UP+NS marriage is approved. Presumably, CSX’s partner will be BNSF.
“In connection with his appointment as CEO and President, [CSX Corporation] and Mr. Angel have entered into an employment letter, dated Sept. 26, 2025 … under which Mr. Angel will receive an initial annual base salary of $1.5 million and will have an initial annual target bonus opportunity under the Company’s Management Incentive Compensation Plan of 175% of base salary,” CSX’s 8-K said. “In addition, Mr. Angel will receive a Sign-On Equity Award under the Company’s 2019 Stock and Incentive Award Plan having a grant date target value of $10 million comprised (i) 50% of performance share units that will be eligible to be earned based on the achievement of performance criteria applicable to the Company’s 2025-2027 long-term incentive program, and any units that are earned will vest and become payable on the third anniversary of his employment start date, and (ii) 50% of stock options that will cliff vest on the third anniversary of Mr. Angel’s start date and will have an exercise price equal to the closing price per share of CSX common stock on the grant date and a seven-year term. Beginning in 2026, Mr. Angel will be eligible to receive an annual Long Term Incentive Award under the Company’s long-term incentive plans on a substantially similar basis as other similarly situated executives of the Company, with the initial grant to be made in 2026 having a grant date target value of $13.5 million. The Company will also provide Mr. Angel with corporate housing in Jacksonville, Fla., will reimburse Mr. Angel for up to $100,000 in non-refundable expenses incurred by him for personal trips cancelled in 2025, and will provide up to $200,000 per year for his personal use of the corporate aircraft.”
It remains to be seen where this sudden change at the top of 500 Water Street in Jacksonville will lead. Let’s hope it doesn’t emulate the title of a 1968 movie starring Rosalind Russell, Stella Stevens, Arthur Godfrey, Van Johnson, Binnie Barnes, Susan Saint-James and Milton Berle.
There are those rightfully concerned that hedge funds and activists have too much influence in the rail industry. Pushing short-term quarterly results and being a card-carrying member of “The Cult of OR” (thanks, Tony Hatch, for coining that phrase) have undoubtedly contributed to why the railroads haven’t really been growing the top line and winning back market share from the rubber-tired monsters tearing up the nation’s highways.
There have been some pockets of progress. Joe Hinrichs should feel very good about what he accomplished in such a short time. Cutting his tenure short was a less-than-optimal move, in my humble opinion, to put it politely.
I was going to say “boneheaded,” but thought better of it. Wouldn’t be very nice.
