ATLANTA – Norfolk Southern CEO Alan Shaw trounced the activist investor’s chief executive candidate during last week’s proxy contest, according to a final tally of shareholder votes the railroad released today.
Shaw received the backing of 64.1% of the investors who voted for board candidates in the days leading up to Thursday’s annual shareholder meeting. Former UPS executive James Barber Jr., who was activist investor Ancora Holdings’ CEO candidate, drew support from just 34.9% of the investors who cast votes, according to results certified by First Coast Results, an independent firm.
After preliminary results were released at the railroad’s shareholder meeting, Ancora claimed that Shaw “barely received support from holders of 50% of the Company’s outstanding shares” and said the results amounted to a vote of no confidence in Shaw.
Out of the 20 board candidates, Shaw ranked ninth in terms of total votes received, while Barber ranked 19th. Nearly 114 million shares were voted for Shaw, while 62 million were voted for Barber.
Railroad chief executives typically receive overwhelming shareholder support. Canadian Pacific Kansas City CEO Keith Creel, for example, was backed by 99.9% of shareholders at the railway’s annual meeting this year.
Three of Ancora’s seven candidates gained seats on the NS board, with railroad financier Gil Lamphere gaining support of 68% of voters, former Canadian National and Kansas City Southern executive Sameh Fahmy receiving 62.5% support, and former Surface Transportation Board member William Clyburn Jr. notching 62% support.
The three NS incumbents who were ousted include Jennifer Scanlon (45.9%), independent chair Amy Miles (36.2%), and John Thompson (29.3%). Miles ranked 18th in terms of votes received, while Thompson was dead last.
“The board and management team are aligned on enhancing shareholder value through the strategy and management team that have been endorsed by our shareholders,” Shaw said in a statement. “I have connected with each of our board members and appreciate the expertise they bring to help advance Norfolk Southern. I also appreciate the support of our employees, customers, and shareholders over the last few months. We are focused on delivering results and building on the considerable momentum underway as we accelerate our operational improvements.”
The proxy contest was seen as a referendum on Shaw’s “better way” strategy that reduces the short-term emphasis on the operating ratio. Instead, NS is taking a long-term view that balances service, productivity, and growth while maintaining train crew levels during freight downturns so that the railroad can capture volume when demand returns.
Ancora, which was critical of the strategy and the railroad’s lagging financial and operational performance, sought a full-blown implementation of the low-cost Precision Scheduled Railroading operating model.
The pension funds want/need their money and are voting their shares. Same with insurers. Gotta cover those checks! Meantime we’re going back to Full 5-Man Crew days. T— is NOT an EHH-type!
Some people still don’t get it.
They get a CEO who has long term vision yet has to fight those who seek to get the share price up. The share price may well rise but the long-term viability of a railroad will be forever eroded.
PSR is but a curse.
The only Ancora stooge to be ranked above Shaw was Lamphere, the railroad financier…everyone else above him was RE-ELECTED to the BoD, which means the shareholders like what they’re doing.
Now they can get back to business until the next investor uprising, I’m sure this isn’t the last Ancora show.
Sanity versus short term hysteria, and sanity won. Plus it sounds like the three new board members are all railroad-oriented and will provide some welcome new perspective to enhance NS growth. I expect that operations going forward will be PSR enhanced, not PSR dominated. I also expect a few more “sour grapes” mutterings from Ancora.
Which begs the question, why is former AIRLINE EXEC and FAILED Amtrak CEO Richard Anderson on the board? What commonalities does his failure at Amtrak and experience in the airline industry have to do with heavy haul railroading? Absolutely nothing except that it is a form of transportation. If that is a requirement then I have as much experience with railroads as he does, probably more. I drive cars and trucks (other types of transportation) and I know I know more about railroads that he does by how he handled his time at Amtrak… Horribly! He dis more damage to the nations passenger rail system by trying to pattern it after airlines than ANY executive before him. And for this he gets another railroad leadership position? Isn’t that like doing the same thing over and over and expecting to get different results? Stupid is as stupid does.
It’s disgusting that Richard Anderson, the AMTRAK destroyer, received the fourth highest number of votes.
Seems to me that Shaw barely hung on.
He finished in the Top 10 Charles. What so bad about that, considering the alternatives? The fact that he beat Barber by such a wide margin is a slam dunk in an election like this and an indictment of Ancora’s leadership decisions in promoting him and by direct association, his EL DESTRUCTO VP of Operations candidate, Jamie Boychuk. I assume his “…take it down to the studs…” remark doomed them before they ever started. How asinine and arrogant can you be? Must have learned that from his mentor, one E. Hunter Harrison, the Trump of the railroad industry.
Vincent — for the incumbent CEO to fall in the top ten, considerably below the former CEO of Northwest Airlines, isn’t all that great. It’s scary.
Could’ve been worse. That don’t make it okay.
PSR (Shaw) = PSR (Ancora) = PSR . Short term vision prevails, stock buybacks continue on steroid in excess of CapEx. Nothing to see here, move along…