Norfolk Southern Corp. on Wednesday defended the composition of its board of directors and did not address the fate of CEO Alan Shaw, who is the subject of an activist group’s efforts to remove him and replace him with Jim Barber, a former top UPS Inc. executive.
In a lengthy letter to shareholders, the Atlanta-based Eastern railroad (NYSE: NSC) said that it has maintained an “ongoing process” of board refreshment, noting that six directors have been appointed to the board over the past five years.
There will be more turnover this spring, when two directors, Mitchell Daniels Jr. and Michael Lockhart, retire following Norfolk Southern’s annual meeting, which has not been officially scheduled but is expected to take place in May.
On Tuesday, Ancora Group Holdings, which has amassed a $1 billion stake in the railroad and has agitated for change at the board and top management, proposed a fresh eight-person slate of directors. It proposed that Barber, who retired from UPS in December 2019 as its COO, be chosen to replace Shaw. Ancora has also proposed that Jamie Boychuk, a former top executive at CSX Corp., be appointed as COO, replacing Paul Duncan.
“Since receiving Ancora’s nominations, members of both the board and management team have held multiple discussions with representatives of Ancora to better understand their views and communicate Norfolk Southern’s perspectives on the execution of our strategy,” the Norfolk Southern letter stated.
The railroad said that its board is “composed of highly qualified, independent directors” who bring “expertise in areas relevant to our business.”
Norfolk Southern said it appointed current directors Christopher Jones as chair of its Safety Committee, succeeding Lockhart; and Jennifer Scanlon as chair of the Governance and Nominating Committee, succeeding Daniels. Jones’ appointment became effective Sept. 1, 2023, and Scanlon’s will become effective at or before Daniels’ retirement.
The railroad said that it grew its intermodal business, its most service-sensitive segment, by 5% year over year in the fourth quarter of 2023. “We also significantly improved train velocity and dwell [time] in the fourth quarter [of] 2023, with both metrics reaching their best levels in several years. We achieved these improvements despite the network disruptions we experienced last year,” the letter stated.
It said that the board “regularly evaluates its composition and will continue its careful review of Ancora’s nominees with a focus on advancing our goal of building the safe, reliable, and resilient railroad our customers and shareholders expect.” The board said it will present its formal recommendation on the nominees in the company’s definitive proxy statement, which will be filed with the Securities and Exchange Commission and mailed to all shareholders eligible to vote at the 2024 annual meeting.
David Shealy
Hope the current board and CEO Alan Shaw win the day against the Ancora coup. Transportation is capital intensive and a 67% operating ratio with what NS has had to deal with since East Palestine looks good.
NS evidently did not own or maintain the railcar that caused the East Palestine derailment. Surely the owner of that car should have some financial responsibility assessed in the aftermath of that unfortunate accident.
Bob
All stakeholders – employees, shippers, communities, and stockholders, should support current Norfolk management who are trying to do the right thing for each of these groups. Anacora is only interested in a quick gain after which they will pack their bags and be gone.
Anacora will absolutely cut employees and service and have no interest in the company’s long-term success.
Jimmy butler
Just some greedy people wanting to change something good than disappear like nothing happened the stb and fra has shown that reducing crews and trains made the railroad worst than what it was they looking at the money but not on the rail doing the work someone ought to follow them home and take from them as they want to take from the railroad employees
Antoine Ivey
Norfolk southern corporation do not look for there employees only them self. It a bad company to work for.
Ron Kaminkow
The NS Board and CEO Shaw were under the gun to institute the most miniscule of reforms regrading safety, labor relations, community outreach, and long term investment. Even THAT was too much for Wall Street to bear. So now we have an “activist” investor group working diligently to turn things around and bring right back the days of cut cut cut and boost those short-term profits. It is time for the North American rail infrastructure to be taken into public hands like it is just about everywhere else in the world!
John Henry Smith
They don’t want Jamie in there he miss a lot things up business wise at csx
Zud
One good example why it’s not good to be a public company. Not defending NS but you can’t make long term goals with an investment group doing this looking for short term results.