RiskMetrics supports TCI Group's nominees for election to CSX board on June 25

By Lisa Kerner

Charlotte, N.C., June 18 - The proxy battle between CSX Corp. and TCI Group heated up after RiskMetrics Group/ISS recommended CSX shareholders vote for the dissident nominees - and not the CSX slate - at the 2008 annual meeting on June 25.

According to TCI Group's statement, the proxy voting advisory firm recommends CSX shareholders vote for four of TCI Group's nominees: Alex Behring, Christopher Hohn, Gil Lamphere and Tim O'Toole. TCI Group, which includes the Children's Investment Fund and 3G Capital Partners, Ltd., also nominated Gary L. Wilson.

"As shareholders with an approximately $5 billion investment, we remain concerned that CSX will not reach its full potential to create shareholder value unless all five of our highly qualified director nominees, with their significant railroad experience, are added to the CSX board to hold management accountable for its performance," TCI Group said in the statement.

CSX, in its response, called the recommendation "superficial" and said RiskMetrics/ISS "reached the wrong conclusion in failing to recommend the election of all of CSX's highly qualified directors."

According to TCI Group, the RiskMetrics/ISS recommendation was based on CSX's "lagging operational performance and the troubling corporate governance implications of the company's aggressive proxy fight defense, and the dissident nominees' track record, skill sets and experience."

CSX, in its statement, accused RiskMetrics/ISS of "substituting its own uninformed judgment" and second-guessing the opinion of the U.S. District for the Southern District of New York, which found that the TCI Group principals "testified falsely in many respects" and violated securities laws in connection with CSX.

In addition, CSX said RiskMetrics/ISS "gave little weight" to the company's "outstanding" performance and governance and favored instead the "the claims and mischaracterizations of the TCI Group."

It was previously reported that TCI Group would appeal the court's ruling, noting that the court did not find that TCI Group violated proxy rules.

CSX is a Jacksonville, Fla.-based railroad and transportation company.

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