In some industries who seats in the executive chair seems less important for the decisions of the company seem to go on in an appropriate matter. In other industries, the CEO is more of a name brand and one example is the railroad industry. Most investors could not name the CEOs of the railroads but CSX’s Hunter Harrison is an exception. Mr. Hunter is considered to be the best railroad executive in North America. He recently joined CSX the stock is up 60% on the expectation profits will go up and service will be better. According to Nick Carey and Bhanu Pratap of Reuters, Mr. Hunter is in the hospital in Jacksonville, Florida where CSX has its headquarters. A few days later in was learned Mr. Harrison died.

Since joining the 3rd largest railroad, Mr. Hunter has closed several rail yards, laid off thousands of workers and instituted a new train schedule system. The new team of operating people have gone through his Hunter training sessions. Typically he favors maximizing asset usage by running fewer, longer trains running on schedule. Mr. Harrison arrival tends to mean more layoffs and higher stock prices.

Linking to dividend paying stocks, in most industries the CEO is important but does not imply the person will automatically push up the stock price. The person’s job is continue to earn revenues on good margins have debt under control to make money for the shareholders and to reinvest in the company to keep doing it. The execution is harder than it sounds for there are many complications, think simple home repairs which turn out bigger than expected. Most companies will not have a savior in the CEO but if something happens to the savior what does it do? how has the savior left the company to the next generation of leadership? If you see transitions are reasonable, then the company can be a hold. If the company depends on one person, it is good to have alternatives on your horizon.

There are more questions than answers, till the next time – to raising questions.