JACKSONVILLE, Fla. — CSX CEO Joe Hinrichs says his railroad strongly disagrees with the assertions that an activist investor made in a letter that was made public this week.
Ancora Holdings seeks to force CSX to promptly engage in merger talks with BNSF or Canadian Pacific Kansas City — and argues that Hinrichs should be replaced for presiding over what it claims is an operational and financial decline. [See “Ancora pushes for CSX to pursue …,” Trains.com, Aug. 19, 2025.] The hedge fund also questioned whether Hinrichs missed an opportunity to seek a merger with Union Pacific before UP and Norfolk Southern agreed to their $85 billion combination last month.
“It is important you know that we strongly disagree with the assertions being made,” Hinrichs wrote in a letter to employees today. “I want to assure you that your leadership team will not allow anyone to undermine the incredible progress you have made. Together, we have faced significant challenges and emerged as one of the top-performing railroads in the industry.”
CSX is running ahead of schedule on two major projects, the rebuilding of its hurricane-damaged Blue Ridge Subdivision and the Howard Street Tunnel clearance project in Baltimore.
Detouring traffic around both main line outages has increased the railroad’s costs and its operating ratio. A combination of harsh weather and the Feb. 1 closure of the Howard Street Tunnel exacerbated congestion, but CSX returned service to normal levels by May.
Hinrichs credited CSX railroaders with surpassing some of its best recent performance measures.
“We are committed to sharing the facts — rooted in qualitative, reliable information — to set the record straight,” Hinrichs wrote.
Chief among them: Since Hinrichs joined the railroad in September 2022, CSX has delivered the top total shareholder returns among the publicly traded Class I railroads.
“We have built a collaborative ONE CSX culture, and we are not going backward,” Hinrichs wrote.
Ancora, which waged a proxy battle at Norfolk Southern in the wake of the February 2023 hazardous materials derailment in East Palestine, Ohio, yesterday made public its Aug. 6 letter to the CSX board.
The hedge fund attacked Hinrichs and claims that his tenure has been marked by “anemic shareholder returns,” “disastrous operational performance,” “poor personnel selection,” and “blown opportunities.”
If the CSX board doesn’t pursue a merger, Ancora said it hoped the board would avoid a contentious proxy fight by naming someone like former CSX Chief Operating Officer Jamie Boychuk — whose name Ancora misspelled — as chief executive. Ancora had touted Boychuk as a potential chief operating officer at Norfolk Southern.
In a note to clients, Citi Research analyst Ariel Rosa was perplexed by Ancora’s letter.
“We find this letter a bit confounding given: 1) its aggressive tone, which we believe is largely unwarranted; 2) its timing, as CSX has been showing improvement on the service issues that impacted the company earlier this year; 3) Ancora’s relatively small holdings, which we calculate as less than 0.2% of CSX shares outstanding; 4) what appears to be a misrepresentation of certain facts; 5) its suggestion that CSX faces ‘permanent impairment of value’ if it does not act imminently; and 6) the suggestion that CSX has not been open to strategic alternatives,” Rosa wrote. “By pushing CSX to be a forced seller, we worry that Ancora risks deteriorating CSX’s negotiating position. We believe a patient approach is likely more prudent.”
CSX has engaged Goldman Sachs to advise it on merger matters, Bloomberg has reported. BNSF has declined to comment on merger speculation.
You have a hedge fund trying to wring maximum gain from their investment on a short term basis. I wonder how many still viable firms have been destroyed by such investors?
Shareholder return is almost meaningless. It all depends on what you measure over what time period. If you measure dividends, CSX offers only a minimal return. If you look at stock price, it is about 50% over the last 4 months, 3% over the last year, and about 50% over the last five years. However, in that period, CSX’s share price has been exceedingly volatile — wide swings up and down.