A Norfolk Southern freight train pulled by Locomotive 7565, a GE ES44DC Evolution Series diesel locomotive.
Medianews Group/reading Eagle Via Getty Images | Medianews Group | Getty Images
Norfolk Southern and activist Ancora struck a deal to avert a second proxy fight in as many years, the railroad announced Thursday.
Norfolk’s board will expand from 13 members to 14 members as part of the settlement, the railroad said. An unspecified candidate will join the railroad’s board after a search process, the company said. Ancora had nominated four candidates to Norfolk’s board in anticipation of an eventual proxy fight but withdrew those candidates as part of the cooperation agreement.
Ancora had been expected to pursue a second proxy fight after former CEO Alan Shaw, whom the activist had targeted for removal, was ousted over an inappropriate workplace relationship with the company’s chief legal officer.
“I am confident that together with Ancora we will find the right independent director to join our board,” Norfolk chief Mark George said.
Ancora got its candidates three board seats at Norfolk’s annual meeting earlier this year, but was unable at that time to fire Shaw. Shares of Norfolk have outperformed railroad peers since Ancora began its engagement with the company.
“In our view, it’s a new day at Norfolk Southern following Board refreshment, management enhancements, and new leadership’s efforts to establish a disciplined and operationally led network,” Ancora President Fred DiSanto and activism chief Jim Chadwick said.
Shaw was ousted from the top job after Norfolk’s board began probing reports of an inappropriate relationship with a senior executive, later revealed to be chief legal officer Nabanita Nag. The company has been conducting an internal investigation into the nature of Nag and Shaw’s relationship since their ouster.
Ancora manages $10 billion for its clients and has pursued campaigns at C.H. Robinson, Forward Air and Hasbro.
