May 9 (UPI) — Three activist investors with Ancora Alternatives LLC nominees were elected to Norfolk Southern’s board amid a bid to oust CEO Alan Shaw, the company said Thursday.
The company, however, said that 10 of its 13 nominees to the company board were approved by shareholders, fending off Ancora’s effort to remove Shaw, falling short of the six seats needed.
“Our shareholders recognize that positive change is underway at Norfolk Southern,” Norfolk Southern said in a statement. “Moving forward, we will continue building on the significant progress Alan Shaw, John Orr, and the entire team have already achieved. Together, we are building a safer, more profitable railroad, closing the margin gap with our peers, and ultimately growing value for our shareholders.”
Ancora is a $10 billion investment firm that owns a large equity stake in Norfolk Southern and has criticized current Norfolk Southern executives for “sustained underperformance.”
The three Ancora activists elected to the board are WIlliam Clyburn, Jr., Sameh Fahmy and Gilbert Lamphere.
Ancora’s Jim Chadwick and Frederick DiSanto said in a statement that the shareholder election of the three board directors from Ancora represents “significant change” at the railroad company. They said it was a resounding vote of no confidence in Shaw.
Ancora has also called for implementation of precision-scheduled railroading or PSR because Ancora said using it led to higher profits.
Norfolk Southern resisted it, saying it left railroads ill-equipped to handle surges in demand. Later the railroad implemented some of the PSR principles during the proxy fight with Ancora.
Shaw defended his performance and said the current executive team is making meaningful progress to create a safer and more profitable railroad.
While some labor unions at the railroad backed Ancora, Shaw said his management team still has the support of 11 of the 13 rail labor unions.
Norfolk Southern suffered a multi-million dollar loss in the East Palestine derailment in Ohio in February 2023. A $600 million settlement was reached in April.
In March three of the company’s trains were involved in a Pennsylvania collision.
