ATLANTA — Amid its proxy fight with an activist investor, Norfolk Southern today nominated former Amtrak and Delta Air Lines CEO Richard Anderson and former U.S. Sen. Heidi Heitkamp to serve on the company’s board of directors.
The NS board also confirmed its unanimous support for CEO Alan Shaw and the railroad’s “better way forward” strategy.
“As a board, our priority is ensuring we have the right composition to guide Norfolk Southern in improving operating performance, enhancing safety, delivering value for our customers and shareholders, and fulfilling our commitments to our stakeholders,” independent board Chair Amy Miles said in a statement. “Our focus on meaningful refreshment — evidenced by the two new directors added in 2023 and two new nominees presented for the 2024 annual meeting — reflects these strategic priorities and our commitment to strong governance and oversight.”
NS also rejected Ancora Holdings’ control slate of eight board nominees as well as what it called Ancora’s “short-sighted strategy.”
“Recklessly chasing cost reduction at the expense of safety and service is not a winning strategy for creating sustainable shareholder value,” NS said in a statement. “Norfolk Southern’s customers, regulators and employees have made it very clear — they will not tolerate service declines and safety lapses in pursuit of extreme near-term cost reductions. As articulated by key regulators, the approach Ancora has outlined, given the track record of certain of its board and management candidates, should be a serious cause for concern among all stakeholders who support the long-term growth and sustainability of the rail industry.”
NS said it will improve productivity in its merchandise network this year, which will reduce variability, complexity, and cost. The railroad also is reviewing its intermodal business to identify opportunities to simplify and accelerate the network, which will improve its operating margins.
The NS board remains committed to holding the railroad’s management team accountable, Miles said.
“We are confident that the continued execution of our balanced strategy — under the vision and leadership of Alan Shaw — is critical as we prioritize operational rigor, safety, and service,” she said. “It is imperative the company continues to execute on its strategy, without interruption or interference, for the benefit of shareholders, customers, communities, and the industry.”
The NS board has met with Ancora representatives and its board nominees. “We have determined that none of them possess skills or experience that are not already well represented among our board nominees,” Miles said. “Further, it would be highly disruptive to our operations, our workers, and the North American supply chain to replace a majority of our well-functioning board, which we have refreshed in a thoughtful and intentional manner over the last several years in order to adopt Ancora’s short-sighted strategy. The board is unanimous in rejecting Ancora’s candidates and remains unwavering in its commitment to act in the best interests of all shareholders.”
Current NS directors Thomas Bell and Steven Leer will not stand for re-election at the annual meeting, while two other directors, Mitchell Daniels Jr. and Michael Lockhart, have reached the mandatory retirement age.
Ancora called NS’s proposed board changes “a weak and reactionary refresh.” In a statement, Ancora also was critical of Anderson, claiming that running an airline and presiding over safety incidents at Amtrak “has no place on the board.”
— Updated at 12:25 p.m. CT to correct Heitkamp’s party affiliation.
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