In an endorsement that could sway thousands of investors with millions of shares ahead of Norfolk Southern’s shareholder meeting on May 9, proxy advisor Glass Lewis has recommended activist investor Ancora’s six board nominees for election. The recommendation is rare at a company the size and in its industry. Significantly, Glass Lewis also suggested that shareholders withhold their support from current CEO Alan Shaw and chair Amy Miles due to “a compelling case for change”.
Ancora has been pushing for significant changes at Norfolk Southern, including ousting Shaw and replacing him with former UPS executive Jim Barber. The activist’s nominees include Betsy Akins, James Barber (who Ancora wants as CEO), William Clyburn, Sameh Fahmy, Gilbert Lamphere, and Allison Landry. Glass Lewis also recommended Jamie Boychuk for the position of COO; he was a CSX executive until 2023 and spent most of his career in logistics before moving to Canadian National railway operator, where Barber started as a Teamster-represented delivery driver and ended up serving as Chief Operating Officer (COO) at United Parcel Service (UPS).
The endorsement from Glass Lewis comes after two major unions representing about half of Norfolk Southern’s unionised workforce threw their weight behind Ancora’s plans for change earlier in the week. “We believe Jim Barber has compelling credentials and track records,” said Glass Lewis, who noted that UPS was one of the biggest rail customers worldwide during a CNBC interview by Barber last month.
Proxy advisors are influential because winning their support is top priority both for activists and management alike. In 2017, proxy advisor Institutional Shareholder Services (ISS) backed Pershing Square Bill Ackman’s seven director nominees at Canadian Pacific Railway Limited; however, the campaign was still close despite ISS and Glass Lewis endorsing it.
A settlement seems unlikely but not impossible as Shaw has previously stated that Norfolk Southern offered “a couple” board seats to Ancora without success. The activist maintains its stance on holding Shaw accountable for poor performance and what they perceive is mismanagement regarding the East Palestine, Ohio derailment incident in February 2023.
Norfolk Southern and Ancora will continue making their case to investors large and small ahead of May’s shareholder meeting as ISS prepares its recommendation this week.
Leave a Reply