ATLANTA — Norfolk Southern will add a new member to its board of directors — the 14th overall and 13th independent director — under a “cooperation agreement” with shareholder Ancora Holdings, NS announced today.
NS and Ancora will work together to identify the new board member, who is expected to add to the board’s gender diversity and executive leadership experience, NS said.
“We are making meaningful progress on key operational metrics, as evidenced by our strong third quarter 2024 results in which we drove productivity, grew volumes, and delivered notable margin improvement. Our strategy is unlocking the full value of the business for shareholders, customers, communities, and employees,” NS CEO Mark George said in a press release. “I am confident that together with Ancora we will find the right independent director to join our Board and support our team as we continue to build on the positive momentum that is underway at Norfolk Southern.”
Activist investor Ancora led an often-nasty proxy fight for control of the railroad last year, ultimately losing in its takeover bid but gaining three seats on the NS board and ousting independent chairperson Amy Miles [see “Norfolk Southern shareholders back CEO …,” Trains News Wire, May 9, 2024]. While CEO Alan Shaw survived that challenge, he was fired just four months later following a brief investigation into a consensual relationship with NS’ chief legal officer that violated company policy [see “Norfolk Southern dismisses CEO Alan Shaw …,” News Wire, Sept. 11, 2024].
As part of the agreement with the railroad, Ancora said it will withdraw its nomination of four director candidates at NS’ 2025 stockholder meetings and agrees to vote in accordance it the board’s recommendations in connection with any vote of shareholders. It also agreed to a standstill provision. The full agreement will be filed with the Securities and Exchange Commission.
Ancora CEO Frederick DiSanto and Ancora Alternatives President James Chadwick said in a statement, “In our view, it’s a new day at Norfolk Southern following board refreshment, management enhancements, and new leadership’s efforts to establish a disciplined and operationally led network. The Company’s focus on governance and its overall progress is further evidenced by the board’s decisive action with respect to its internal investigation, which we are told has been thorough and wide ranging.”
