News & Reviews News Wire Norfolk Southern to add new board member as part of agreement with Ancora Holdings

Norfolk Southern to add new board member as part of agreement with Ancora Holdings

By Trains Staff | November 14, 2024

Ancora will withdraw board candidates at 2025 shareholder meeting, signs standstill agreement

Email Newsletter

Get the newest photos, videos, stories, and more from Trains.com brands. Sign-up for email today!

Norfolk Southern logoATLANTA — 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.”

5 thoughts on “Norfolk Southern to add new board member as part of agreement with Ancora Holdings

  1. George is a typical schill for a hedge fund wanting an insider to manage “their way.” If NS would have been serious about keeping Ancora on the outside they would have put a real railroader in charge and not a bean counter. They have made the same mistake UP made when they put Lance Fritz in charge of their railroad. As a marketer, he took his cues from the bean counters and nearly drove the railroad into the ground. Only the installation of Jim Vena, someone who had actually operated a train, in charge was the UP able to begin to turn things around. I only hope that NS doesn’t lose its way to management people who don’t anything about operations except the financial side of things. That is the real threat here, what George and Ancora being so chummy represents. The “stand still” agreement is nice but only works if the CEO has the chops to invoke it if Ancora doesn’t keep its word to stand in abeyance. The fact that they were going to propose four more candidate board members at NS’s stock holder meeting means that the threat of something hostile is still in the works.. Sounds like the Democrats saying they will “fight on” even though they were soundly defeated by the US Populace across the board. The nect near months will surely reveal what Ancora us going to do and how NS reacts. Sounds like a good time to thing about selling you stock as the Fox is trying to find another way into the hen house.

    1. Maybe NS should consider “Green Lights To Innovation That Would Squeeze The Waste Out Of Distribution”

  2. My bet is that NS will go back to an extreme PSR position. The lure of low ORs is too great for hedge funds.

    “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.”

    This one phrase says it all. “… establish a disciplined and operationally led network.” According to the statement, Shaw’s vision for a railroad that could grow by serving its customers was fundamentally flawed.

You must login to submit a comment