Mantle Ridge installed Harrison; CSX adopted precision railroading

On January 18, 2017, Hunter Harrison terminated his employment at Canadian Pacific and began working exclusively with Mantle Ridge, which held just under 5 percent of CSX; CSX said the requested package would cost more than $300 million.

On March 6, 2017, CSX and Mantle Ridge signed a letter agreement: Harrison became CEO, Mantle Ridge founder Paul Hilal became vice chairman with board seats, and the board grew to 13 members.

Harrison implemented Precision Scheduled Railroading, cutting costs and boosting earnings; by mid-October 2017 CSX shares were up about 51 percent for the year.

CSX stock added about 51 percent in the first ten months of 2017 under Harrison's precision railroading; the board expanded with activist-aligned directors.

Mantle Ridge brought a proven CEO, not just a plan, giving its thesis unusual force.

The board settled within weeks, avoiding a proxy fight and getting the operator in place fast.

PSR converts asset efficiency into margin quickly, which is why the stock re-rated so fast.

An activist's single-person thesis, that the right operator changes the economics, can beat a portfolio plan, but it concentrates all the risk in one hire.

CSX's third-quarter 2017 earnings rose 6.3 percent year over year with the stock at record highs in November, though the rushed schedule caused customer disruptions. The PSR model remained at the core of CSX's strategy.