Yahoo Finance Proxy fight to play out for control of Norfolk Southern railroad at May shareholders meeting
April 29 (UPI) -- An unusual proxy fight is about to take place for control of Norfolk Southern railroad amid a report critical of company leadership that calls for a change in management.
The Ohio-based Ancora Holdings Group on Monday said yes to Glass, Lewis and Company's call for Norfolk Southern Corporation shareholders to vote to elect six new Ancora-backed board members at Norfolk's upcoming May 9 shareholders meeting.
"We believe Ancora has presented a compelling case for supporting a substantial overhaul of the Company's current leadership," Glass Lewis' report noted regarding the need for a change in leadership at Norfolk Southern.
The San Francisco, Calif.-based Glass Lewis is a leading independent proxy advisory firm, and Ancora owns a large equity stake in the Atlanta, Ga.-based Norfolk Southern Corporation.
Glass Lewis had recommended to shareholders Ancora nominees Betsy Atkins, James Barber Jr., William Clyburn Jr., Sameh Fahmy, Gilbert Lamphere and Allison Landry.
They also called for current board Chair Amy Miles, board director Claude Mongeau and Norfolk Southern's CEO Alan Shaw to "be immediately replaced due to their apparent responsibility for sustained underperformance" in their current job roles.
It is considered fairly unusual but not uncommon for a proxy firm to get involved in the way Glass Lewis has.
On Monday, Norfolk Southern's CEO was on CNBC "to discuss how he and the current leadership team are creating 'A Better Way' for our customers, employees and shareholders," the company posted on X.
"We vigorously disagree with that report," Shaw said Monday on CNBC's "Closing Bell Overtime" show about Lewis Glass report.
The Glass Lewis report states that it is "not readily evident" to them how Norfolk Southern under Shaw and his team's leadership "had built up a sufficiently positive track record such that investors might reasonably have the patience to allow management to implement a relatively novel operating strategy."
Monday afternoon, Shaw defended his management of Norfolk Southern and was critical of the report.
"What it fails to do is take into account the meaningful progress and change that our board has deliberately put forth that is making us a safer and more profitable railroad," said Shaw.
It was noted how multiple labor unions "have now taken the relatively extraordinary step of publicly supporting" the "activist hedge fund in Ancora" in their effort to oust Shaw and replace other Norfolk Southern board members, which the report says "raises further questions" about the company's current management.
"It's clear Ancora is making backroom deals," Shaw claimed Monday on "Closing Bell Overtime."
"We remain really engaged with our union workforce," he said, noting how his management team still has the support of 11 of their 13 railroad unions.
Norfolk Southern has been through a series of legal challenges since its highly publicized Ohio train derailment in February last year, and the ensuing environmental ramifications which came as a result, in addition to a multi-million dollar earnings loss.
In early April, it was announced that Norfolk Southern had reached a tentative $600 million settlement in the East Palestine derailment.
In March, three Norfolk Southern trains were involved in a collision in eastern Pennsylvania when two engines ending up in the Lehigh River near Allentown.
