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Is superstar railroad executive Hunter Harrison worth a $200 million pay package? For that matter, is any CEO worth that? The question has arisen in a shareholder activist's campaign to shake up CSX Corp., one of North America's major railroads.
In a highly unusual public negotiation, Harrison, 72, is demanding compensation in the nine figures to take the job, much of it tied to stock awards. The total compensation would be big enough to place Harrison among the country's top-paid public company executives.
"Astronomical" pay packages sometimes come when companies are hiring someone to lead a turnaround situation, said Aalap Shah, managing director at compensation consultant Pearl Meyer. In those cases, the usual practice of setting pay—by looking at what peers receive—can get scrapped. Instead, businesses sometimes "end up paying the price tag that the individual demands,'' Shah said.