Activist investor wins 3 Norfolk Southern board seats but won’t have control to fire CEO
Norfolk Southern’s CEO will be under more pressure to improve profits after the railroad’s shareholders voted to elect three of the board members an activist investor nominated
Norfolk Southern’s CEO will be under more pressure to improve profits after the railroad’s shareholders voted Thursday to elect three of the board members an activist investor nominated, but he won’t be fired right away.
Ancora Holdings had nominated seven directors as part of a bid to take control of the railroad’s 13-member board and overhaul its operations. The key support Ancora picked up from major investors, two major rail unions and proxy advisory firms wasn’t enough to persuade shareholders to elect Ancora's entire slate.
Ancora executive Jim Chadwick blamed passive investors for failing to support the investors' nominees. Chadwick promised to hold CEO Alan Shaw accountable and keep fighting to improve the railroad.
“For the passive investors: If anything should go wrong here and there’s another derailment and people die, this is on you,” Chadwick said. “You ignored the recommendation of the proxy advisors, the unions, the largest customer of the company. You gave us literally no support and we still won three board seats without you. What happens at Norfolk Southern now is on your firms and your conscience.”
The Norfolk Southern board members voted out included Chair Amy Miles.
Norfolk Southern's stock price, which soared after Ancora announced its campaign to oust Shaw, immediately fell after the results of the vote were announced and finished Thursday down 2.5% at $226.33.
Shaw had argued that Ancora’s plan would cut the railroad too deep and jeopardize the improvements in safety and service Norfolk Southern has made since its
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