Renowned proxy advisory firm Institutional Shareholder Services (ISS) has recommended that shareholders support five out of seven board nominees proposed by activist investor Ancora in its campaign against railroad company Norfolk Southern’s leadership. While ISS did not endorse Ancora’s preferred candidate for CEO, Jim Barber, the firm still rated him as a credible director and possible replacement nonetheless. The endorsement arrived following similar recommendations from proxy advisory Glass Lewis on Monday and two unions earlier in the week.
ISS suggested that shareholders should vote against Norfolk Southern’s current board chair Amy Miles while endorsing CEO Alan Shaw for reelection to the board, as it believes this would provide Ancora with a clear mandate to implement change without securing control of the entire board. ISS highlighted Ancora’s well-balanced nominee list consisting mostly of experienced executives and industry experts in its report published on Tuesday.
The influential proxy advisory firm criticised Norfolk Southern’s governance, stating that it was most evident in the company’s failure to communicate effectively with investors and prioritise their best interests. ISS noted that Miles had a significant role in this issue as board chair. The report added: “As board chair, Amy Miles arguably bears the most responsibility for this state of affairs.”
Shareholders will cast their ballots before an April 16 virtual meeting where they have also been asked to approve Norfolk Southern’s executive compensation plan and a proposal from Ancora that would require shareholder approval in future mergers or acquisitions worth more than $50 million. This latter point represents an opportunity for smaller investors like pensions and funds which believe major decisions should be put up to vote, as opposed to being approved by management alone.
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