Ancora-led group wants new CEO, COO at Norfolk Southern; nominates new members to board By Reuters

By Nathan Gomes

(Reuters) -A group of investors led by Ancora Holdings on Tuesday said they have proposed replacing the top management, including the CEO, at railroad operator Norfolk Southern (NYSE:) and has also nominated eight directors to its board. The investor group, which holds a “large equity stake” in the company, aims to replace CEO Alan Shaw with former UPS executive Jim Barber and COO Paul Duncan with Jamie Boychuk. Shares of Norfolk rose about 1.3% in morning trade. They fell nearly 5% in 2023 amid operating challenges and the fallout from a costly derailment in East Palestine, Ohio, last year, which invited scrutiny from regulators. “Norfolk Southern, which has exceptional rail workers and the country’s best customers, has suffered for years due to its Board’s poor decisions with regard to the Company’s leadership,” the investor group said. The candidates for the board include several railroad industry veterans and former Ohio governor and congressman John Kasich. Norfolk did not immediately respond to a Reuters request for comment. In January, Norfolk reported fourth-quarter profit below analysts’ estimates, hurt by lower revenue across the U.S. railroad operator’s merchandise, intermodal and coal businesses. CEO Shaw told analysts after the results that Norfolk was streamlining its cost structure, including a program to reduce management headcount by roughly 7% to help offset increases in critical operating areas. “Every public Class 1 railroad has been targeted by an activist since 2011. Campaigns have largely been effective, particularly at CP (2011) and CSX (NASDAQ:) (2016), which transformed two of the industry’s laggards into leaders,” BMO wrote in a note earlier this month. The Wall Street Journal reported late last month that the Ancora Holdings-led group had taken a roughly $1 billion stake in Norfolk Southern and had nominated a majority slate of directors.