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Norfolk Southern activist Ancora falls short of ousting CEO but wins three board seatsactivism

Shareholders made significant decisions on Thursday regarding the leadership of Norfolk Southern, one of the largest railroads in the United States. While three of Ancora’s director nominees were elected, incumbent CEO Alan Shaw managed to retain his position, marking the end of a contentious proxy battle.

The elected Ancora candidates are William Clyburn, Sameh Fahmy, and Gilbert Lamphere, indicating shareholders’ desire for change within the company. Notably, current board chair Amy Miles and incumbent directors Jennifer Scanlon and John Thompson did not win reelection.

Although shareholders did not vote for Ancora’s CEO pick, Jim Barber, the activist group remains committed to advocating for a leadership change. Despite the victory in the boardroom, Norfolk Southern’s shares experienced a decline of over 5% following the announcement.

Ancora’s success in the proxy battle represents a significant milestone for the Ohio-based investment firm, which has steadily expanded its activism practice over the past decade. The campaign garnered support from various stakeholders, including unions, customers, and influential proxy advisory firms like Glass Lewis and ISS.

In response to the election results, Norfolk Southern expressed a willingness to collaborate with the newly elected directors to unlock the company’s full potential. While Shaw’s retention was a key focus of Ancora’s campaign, the activist group also raised concerns about governance and the company’s operational strategy.

Despite initial resistance to adopting precision-scheduled railroading (PSR), Norfolk Southern eventually embraced elements of the model amid pressure from Ancora and other stakeholders. The shift in strategy reflected a broader acknowledgment of the need for change within the company.

Moving forward, Ancora remains committed to holding Shaw accountable and advocating for measures that drive shareholder value. The ongoing dialogue between the activist group and Norfolk Southern’s leadership underscores the importance of corporate governance and shareholder activism in shaping the future of the railroad industry.

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