Lindsay Frost, Agenda, June 26, 2017
Newly minted CSX CEO Hunter Harrison is lauded as transforming the railroad game for Canadian Pacific and several other railroad networks. Although he took his post at CSX in March, investors were tasked with ratifying the $84 million pay package it would take to keep him. While considering the vote, shareholders voiced concerns about his health after a report was leaked noting that he has to work from home sometimes and uses an oxygen tank to help him breathe.
Harrison’s situation has put the question of materiality, and when and if to disclose CEO health issues, back in the spotlight. Considered the board’s responsibility, making health disclosures can be a difficult decision depending on the situation, sources say.
“[When boards are considering disclosing], they are caught in this world between privacy and HIPAA [Health Insurance Portability and Accountability Act of 1996] and material information,” says Davia Temin, CEO of strategy and communications consulting firm Temin and Company, who has served on multiple boards. “Clearly shareholders and analysts want the information immediately, and very often CEOs who are ill want more time [before disclosing]. Different companies have threaded the needle differently and walked that thin line differently.” Subscription required for full access. […read more]
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