Michael Cory
About Michael Cory
Michael A. Cory, age 62, is Executive Vice President and Chief Operating Officer of CSX, appointed in September 2023; he oversees transportation, network operations (terminals), mechanical, engineering and labor relations and brings ~40 years of railroad operations experience, including EVP & COO at Canadian National (2016–2019) and a post‑retirement stint as President of Pacific National in 2021 . In 2024, his key accomplishments included reworking CSX’s operating plan for the Howard Street Tunnel closure and Blue Ridge outages, implementing the reacquired MNBR lease to improve service, and launching SAFE CSX to identify safety hazards and mitigate risks . CSX’s executive incentives tie near‑term pay to operating income, margin, initiative‑based revenue growth, safety, trip plan compliance, and fuel efficiency, and long‑term pay to average annual operating income growth and economic profit, with a Relative TSR modifier, aligning compensation to performance levers that drive profitability and shareholder value .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Canadian National Railway (CN) | Executive Vice President & Chief Operating Officer | 2016–2019 | Implemented scheduled railroading as a transformative operating model . |
| Canadian National Railway (CN) | Senior leadership roles (SVP Network Ops; SVP Eastern Region; SVP Western Region; VP Network Ops) | 1981–2019 | Led operations across regions and network operations, building deep rail operations expertise . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pacific National (Australia) | President | 2021 | Led Australia’s largest private railroad; applied scheduled railroading and operations rigor . |
Fixed Compensation
| Item | FY 2024 |
|---|---|
| Base Salary ($) | 725,000 |
| Target Bonus (% of Base Salary) | 100% |
| Annual Bonus – Earned under MICP before clawback ($) | 594,500 |
| Annual Bonus – Actually Paid after clawback ($) | 581,007 |
| All Other Compensation ($) | 606,698 (includes relocation expenses, tax gross‑ups, perqs, and contributions) |
Perquisites and other: 2024 perqs included relocation expenses of $459,244 and a relocation tax gross‑up of $119,704; additional items included financial planning/tax preparation and the company match for charitable/PAC contributions; CSXtra 401(k) employer contribution was $10,350; no EDCP employer contribution for Cory in 2024 . Messrs. Hinrichs, Cory and Fortune (hired after Jan 1, 2020) are eligible for an additional non‑elective 3% contribution of base pay and short‑term incentive above qualified plan limits; Cory did not make EDCP deferrals in 2024 .
Performance Compensation
2024 Short‑Term Incentive Plan (MICP) structure and outcomes
| Metric | Weighting | Adjusted Payout Contribution | Unadjusted Payout Contribution | Notes |
|---|---|---|---|---|
| Operating Income | 30% | 21% | 17% | Adjustment excluded a $108M non‑cash goodwill impairment at Quality Carriers . |
| Operating Margin | 30% | 17% | 0% | Fuel price formula raised margin target by 20bps due to avg highway diesel at $3.76/gal . |
| Initiative‑based Revenue Growth | 10% | 20% | 20% | Non‑GAAP line‑haul revenue from customer initiatives . |
| FRA Personal Injury Rate | 5% | 0% | 0% | Safety metrics reflect actuals as of early 2025 . |
| FRA Train Accident Rate | 5% | 0% | 0% | Safety metrics reflect actuals as of early 2025 . |
| Trip Plan Compliance (TPC) | 10% | 7% | 7% | Customer service execution metric . |
| Fuel Efficiency | 10% | 17% | 17% | Environmental stewardship metric . |
| Total Achievement | — | 82% | 61% | Committee applied standard impairment exclusion; no individual performance adjustments . |
Target Incentive Opportunity for Cory was 100% of base salary for 2024; MICP includes a possible individual performance modifier up to 1.5x for executives, max total payout up to 250% of target, though no individual adjustments were applied in 2024 .
2024–2026 Long‑Term Incentive Plan (LTIP) design
| Component | Weighting | Performance Metrics | Modifier and Cap | Vesting |
|---|---|---|---|---|
| Performance Share Units (PSUs) | 60% | Average Annual Operating Income Growth (50%); Economic Profit (50%) | Relative TSR linear modifier ±25%; payout capped at 250%; no impact between 40th–60th percentile | Earn/vest based on three‑year performance; subject to continued service . |
| Non‑qualified Stock Options | 20% | Stock price appreciation | — | Three‑year graded vesting: one‑third each on Feb 16, 2025/2026/2027 . |
| Restricted Stock Units (RSUs) | 20% | Time‑based | — | Three‑year graded vesting: one‑third each on Feb 16, 2025/2026/2027; plus a Sep 25, 2023 grant vesting Sep 25, 2026 . |
2024 grants for Cory: RSUs 54,447 units; options 54,447 at $36.72 exercise price; grant date fair values $2,520,020 (stock awards) and $630,006 (options), totaling $3,150,026; PSUs granted under 2024–2026 LTIP with target units eligible for 0–250% payout with TSR modifier .
Equity Ownership & Alignment
| Ownership Measure | Value |
|---|---|
| Shares beneficially owned | 81,535 |
| Shares acquirable within 60 days | 18,149 |
| Total beneficial ownership | 99,684 (<1% of class) |
| Shares outstanding reference | 1,957,828,555 (as of March 1, 2025) |
| RSUs not vested (12/31/2024) | 60,163 ($1,941,460 market value at $32.27) |
| PSUs target not vested (12/31/2024) | 70,041 ($2,260,223 market/payout value at $32.27) |
| Options unexercisable (12/31/2024) | 54,447 (exercise price $36.72; expire 2/16/34) |
| Shares vested in 2024 | 5,158 ($190,846 value realized) |
Ownership policy: EVPs must hold 4× base salary and retain 100% of net shares until compliant; eligible equity toward guidelines includes vested and unvested RSUs, vested PSUs, and other CSX stock; hedging and pledging of CSX securities are prohibited . Insider trading policy is maintained and filed as an exhibit to the 2024 Annual Report .
Employment Terms
| Provision | Terms |
|---|---|
| Change‑of‑Control (CoC) Severance (double trigger) | Cash severance equal to 2.99× base salary + target bonus; pro‑rata annual bonus for year of termination; welfare benefits for 3 years; $40,000 outplacement; equity vests/exchanges for cash at fair market value; EDCP balance distributed upon CoC; “best‑net‑benefit” approach to excise taxes; no excise tax gross‑ups . |
| CoC Hypothetical Aggregate (as of 12/31/2024) | Total $10,154,176 = Severance $4,335,500; Pro‑Rata Bonus $594,500; Equity $5,100,306; Welfare Benefits $83,870; Outplacement $40,000 . |
| Termination Without Cause / Good Reason (non‑CoC) | Severance equal to 1× base salary + 1× target bonus, paid over 12 months; prorated equity settled on original schedules; pro‑rata annual bonus; $40,000 outplacement + $12,000 financial planning; option to continue medical/dental during installment period . |
| Non‑compete / Non‑solicit | Special Retirement Plan includes forfeiture for competition/detrimental acts; Cory does not participate in pension plans based on hire date; broader severance plan non‑compete terms not detailed in proxy disclosures . |
| Clawback | SEC‑required Clawback Policy adopted Oct 10, 2023; “little r” restatement led to MICP and LTIP recoveries across executives; Cory’s 2023 MICP clawback was $13,493 (recovered via reduction to 2024 MICP) . |
Performance & Track Record
- 2024 operational focus: Cory led rework of operating plans amid network disruptions (Howard Street Tunnel closure; Blue Ridge hurricane impacts), launched SAFE CSX, and emphasized service, safety leadership, and customer partnership to improve velocity, dwell, and trip plan compliance .
- Q1–Q2 2025 commentary: Network recovery actions included reducing cars online without embargoes, adding locomotives and mechanical resources, shifting engineering crews, and sustaining war‑room coordination; committed to incremental improvement through 2025 with two major projects on schedule (Howard Street Tunnel; Blue Ridge subdivision) unlocking capacity .
- Service measures context: Intermodal TPC rebounded post‑hurricane, while carload TPC lagged due to fluidity constraints; emphasis on safety showed sequential declines in FRA injury rate and improvement efforts such as yard inspection drones and wayside car health monitoring .
- Technology and operations: Adoption of real‑time operations portal (RTOP) to strengthen communication and decisions; use of yard technology and data visibility to improve throughput and resiliency (e.g., surge yard strategy at Waycross) .
Compensation Structure Analysis
- Mix and rigor: 60% of LTIs are performance‑based PSUs with two balanced profitability metrics (operating income growth; economic profit) and a Relative TSR modifier; 20% options and 20% RSUs provide at‑risk, time‑based exposure and upside only with share price appreciation .
- Short‑term shift to Operating Margin: Replacing Operating Ratio with Operating Margin in 2024 emphasizes growth with efficiency; formulaic fuel price adjustment applied to margin targets to reflect cost volatility .
- Discretion and adjustments: Committee applied a standard impairment exclusion to 2024 MICP (Quality Carriers goodwill) raising total achievement from 61% to 82%; no individual performance modifiers were applied in 2024 .
- Clawback enforcement: Recovery executed for excess 2023 MICP amounts due to “little r” restatement (Cory: $13,493), signaling policy adherence and potential near‑term cash bonus compression .
- Perqs and tax gross‑ups: Cory received relocation tax gross‑ups ($119,704) and significant relocation benefits ($459,244) per policy; while not golden parachute gross‑ups, these are shareholder‑sensitive items to monitor .
Vesting Schedules and Insider Selling Pressure
| Award Type | Grant Date | Vesting Schedule | Units / Terms |
|---|---|---|---|
| RSUs (annual) | Feb 16, 2024 | 1/3 on Feb 16, 2025; 1/3 on Feb 16, 2026; 1/3 on Feb 16, 2027 | 54,447 RSUs |
| Options (annual) | Feb 16, 2024 | 1/3 exercisable Feb 16, 2025; 1/3 Feb 16, 2026; 1/3 Feb 16, 2027 | 54,447 options at $36.72; expire 2/16/2034 |
| RSUs (off‑cycle new hire) | Sep 25, 2023 | Vest on Sep 25, 2026 | Included in “Shares Not Vested” |
| PSUs | 2023–2025; 2024–2026 cycles | Earn based on 3‑yr performance; Relative TSR ±25% modifier; 0–250% payout | 70,041 target PSUs unearned (12/31/2024) |
Upcoming vesting dates (Feb 16 annually, Sep 25, 2026) may create episodic sell pressure; Cory had 5,158 shares vest in 2024 and no option exercises, indicating moderate realized supply to date .
Equity Ownership & Pledging
- Ownership: 99,684 total beneficial shares (<1% of class); 18,149 acquirable within 60 days; significant unvested RSUs/PSUs and unexercisable options align future value to performance and tenure .
- Policy: CSX prohibits hedging/pledging; EVPs must meet 4× salary ownership guideline, retaining 100% of net shares until compliant—reduces misalignment and leverage risk; individual compliance status not disclosed .
Employment Terms
- Severance economics: Double‑trigger CoC benefits (~$10.15M hypothetical total as of 12/31/2024) with 2.99× salary+target bonus cash severance, equity vesting/exchange, and welfare/outplacement; non‑CoC severance equals 1× salary+1× target bonus with prorated equity on original schedules .
- Deferred comp: EDCP distributions accelerate upon CoC; Cory did not contribute to EDCP in 2024 but is eligible for non‑elective contributions due to post‑2020 hire date .
- Clawback: Active enforcement following “little r” restatement demonstrates governance rigor; Cory’s 2023 MICP clawback $13,493 was recovered via his 2024 payout .
Investment Implications
- Alignment is solid: 60% performance‑based LTIs (operating income growth/Economic Profit with TSR modifier) plus prohibitions on hedging/pledging and 4× salary ownership guidelines create robust pay‑for‑performance alignment and reduce leverage risk .
- Near‑term selling pressure likely muted: Upcoming graded vesting in Feb each year and a single Sep 2026 RSU tranche suggest manageable episodic supply; 2024 vesting was 5,158 shares with no option exercises .
- Retention protected but not excessive: Double‑trigger CoC terms and 1× salary+bonus non‑CoC severance are competitive; equity subject to original schedules outside CoC, balancing retention and shareholder protection; no excise tax gross‑ups (best‑net‑benefit) .
- Governance watch‑items: 2024 MICP impairment exclusion raised payouts (82% vs 61% unadjusted) and relocation tax gross‑ups for Cory warrant monitoring; clawback enforcement on 2023 payouts reflects policy discipline .
- Execution risk: Network recovery and service improvements under Cory’s leadership are in progress; capacity projects (Howard Street Tunnel, Blue Ridge) and operational actions (cars online reduction, RTOP) underpin medium‑term performance, but service metrics and safety outcomes remain key to incentive realization .