ATLANTA – Norfolk Southern CEO Alan Shaw trounced the activist investor’s chief executive candidate during last week’s proxy contest, according to a final tally of shareholder votes the railroad released today.
Shaw received the backing of 64.1% of the investors who voted for board candidates in the days leading up to Thursday’s annual shareholder meeting. Former UPS executive James Barber Jr., who was activist investor Ancora Holdings’ CEO candidate, drew support from just 34.9% of the investors who cast votes, according to results certified by First Coast Results, an independent firm.
After preliminary results were released at the railroad’s shareholder meeting, Ancora claimed that Shaw “barely received support from holders of 50% of the Company’s outstanding shares” and said the results amounted to a vote of no confidence in Shaw.
Out of the 20 board candidates, Shaw ranked ninth in terms of total votes received, while Barber ranked 19th. Nearly 114 million shares were voted for Shaw, while 62 million were voted for Barber.
Railroad chief executives typically receive overwhelming shareholder support. Canadian Pacific Kansas City CEO Keith Creel, for example, was backed by 99.9% of shareholders at the railway’s annual meeting this year.
Three of Ancora’s seven candidates gained seats on the NS board, with railroad financier Gil Lamphere gaining support of 68% of voters, former Canadian National and Kansas City Southern executive Sameh Fahmy receiving 62.5% support, and former Surface Transportation Board member William Clyburn Jr. notching 62% support.
The three NS incumbents who were ousted include Jennifer Scanlon (45.9%), independent chair Amy Miles (36.2%), and John Thompson (29.3%). Miles ranked 18th in terms of votes received, while Thompson was dead last.
“The board and management team are aligned on enhancing shareholder value through the strategy and management team that have been endorsed by our shareholders,” Shaw said in a statement. “I have connected with each of our board members and appreciate the expertise they bring to help advance Norfolk Southern. I also appreciate the support of our employees, customers, and shareholders over the last few months. We are focused on delivering results and building on the considerable momentum underway as we accelerate our operational improvements.”
The proxy contest was seen as a referendum on Shaw’s “better way” strategy that reduces the short-term emphasis on the operating ratio. Instead, NS is taking a long-term view that balances service, productivity, and growth while maintaining train crew levels during freight downturns so that the railroad can capture volume when demand returns.
Ancora, which was critical of the strategy and the railroad’s lagging financial and operational performance, sought a full-blown implementation of the low-cost Precision Scheduled Railroading operating model.
