Norfolk Southern’s CEO faces increased pressure to boost profits following Thursday’s shareholder vote, where three board members nominated by an activist investor were elected. However, CEO Alan Shaw will not be removed immediately.
Ancora Holdings had nominated seven directors in a bid to gain control of the railroad’s 13-member board and overhaul its operations. Despite significant backing from major investors, two major rail unions, and proxy advisory firms, Ancora fell short of convincing shareholders to elect its entire slate.
Ancora executive Jim Chadwick criticized passive investors for not supporting their nominees, pledging to hold CEO Alan Shaw accountable and continue advocating for improvements at the railroad.
“For the passive investors: If anything goes wrong here, if there’s another derailment and lives are lost, this responsibility rests on you,” Chadwick remarked.
Norfolk Southern locomotives (Tom Brennan/Getty Images)
“You disregarded the advice of proxy advisors, unions, and the company’s largest customer. Despite receiving little support, we still secured three board seats. The future of Norfolk Southern now rests on your firms and your conscience.”
The board members ousted included Chair Amy Miles.
Norfolk Southern’s stock price, which initially rose after Ancora’s campaign to remove Shaw was announced, declined following the vote results and closed Thursday down 2.5% at $226.33.
Shaw had argued against Ancora’s plan, expressing concerns that it would excessively cut the railroad’s operations and potentially undermine the safety and service improvements made since a serious derailment in February 2023 in East Palestine, Ohio.
