Investor group seeks to replace Norfolk Southern CEO, management team

Activist investors nominate slate of directors and new management at Atlanta-based railroad
The Norfolk Southern logo is prominently displayed on the company's headquarters in Atlanta, as viewed from W. Peachtree Street NE on Tuesday, April 4, 2023.
 Miguel Martinez /

Credit: Miguel Martinez

Credit: Miguel Martinez

The Norfolk Southern logo is prominently displayed on the company's headquarters in Atlanta, as viewed from W. Peachtree Street NE on Tuesday, April 4, 2023. Miguel Martinez /

An activist investor group has launched an effort to replace management of Atlanta-based Norfolk Southern, nominating a slate of potential board members and proposing that a former UPS executive take over as CEO of the railroad.

Ancora Holdings Group, an Ohio-based investment firm, proposed in a presentation to investors that former UPS Chief Operating Officer Jim Barber replace Norfolk Southern CEO Alan Shaw. Barber retired from Sandy Springs-based UPS in 2020.

The move by Ancora comes after Norfolk Southern has faced harsh scrutiny since the derailment of its train carrying hazardous materials in East Palestine, Ohio, more than a year ago. The Feb. 3, 2023, wreck has prompted lawsuits from residents, businesses and shareholders and caused the company to tally more than $1 billion in charges for its response.

The eight board members Ancora nominated would come before shareholders for a vote at Norfolk Southern’s annual meeting later this year. The board currently has 15 members.

Ancora, which describes itself as a “long-term supporter of union labor,” has amassed hundreds of thousands of shares in Norfolk Southern over the last several months for a roughly $1 billion stake in the company. Norfolk Southern has a market capitalization of about $57 billion.

Norfolk Southern CEO Alan Shaw speaks during an interview at the Norfolk Southern Headquarters in Atlanta on Tuesday, April 4, 2023. Miguel Martinez /

Credit: Miguel Martinez

icon to expand image

Credit: Miguel Martinez

Norfolk Southern issued a statement Tuesday saying its board and management team “are committed to acting in the best interests of the company and our shareholders.”

The company said members of its board and management team have had discussions with Ancora representatives “to better understand their views and communicate Norfolk Southern’s perspectives on the execution of our strategy.” The board also evaluated and interviewed all of Ancora’s nominees, according to the railroad.

Norfolk Southern said its board has “maintained an ongoing process of refreshment.” The company also said “we dramatically improved our safety metrics and service product in each of the last two years” and added: “We remain confident in our ability to further grow volumes, improve service, and deliver long-term value for Norfolk Southern as well as our shareholders and customers.”

The Norfolk Southern board plans to continue its review of Ancora’s nominees and present its recommendations on them in the company’s filing with the U.S. Securities and Exchange Commission in advance of the company’s annual shareholder meeting. The date for the meeting has not yet been set.

The company last month reported that its 2023 net income was down 44% compared with 2022, and it announced plans to cut management staff.

In addition to proposing a replacement CEO, Ancora also proposed former CSX executive vice president of operations Jamie Boychuk to become chief operating officer of Norfolk Southern.

The investor group said it believes the new board members and new management it proposes “have the experience and strategy required to turn Norfolk Southern into a safer, more sustainable railroad that is growing profitably while also yielding more stability for customers and employees.”

“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, safety priorities and strategy,” Ancora said in a written statement. The investor group added that Shaw “has drawn the condemnation of policymakers and the skepticism of underwhelmed analysts and shareholders.”

Ancora said it made a case to the existing board at Norfolk Southern for change, criticizing the company’s strategy and Shaw’s background, and said it met with Shaw “in hopes of having him change our view.”

“While all this was going on, however, Norfolk Southern was sending its private jet to Washington, D.C., so executives could pursue the support of regulators and the company started requesting public support from customers as part of its planned fight against us,” according to Ancora.

TD Cowen air freight & surface transportation analyst Jason Seidl wrote in a note to investors that given the challenges Norfolk Southern faces, “we believe it is likely that the current Board will be under pressure.” He added that shareholders could look past external factors that worsened Norfolk Southern’s performance “in favor of a fresh slate and revised strategy.”

Ancora said it plans to later share a “100-day transition plan” and a network strategy.

The investment firm plans to file a proxy in the coming weeks, and it’s possible there could be some resolution before then, according to Ancora CEO Fred DiSanto. Ancora said it previously sought to settle the matter privately with Norfolk Southern.

“If it goes down to a proxy, we’re gonna go at it aggressively. We really believe that what we’re putting in front of the shareholders, versus what they are living with today, is superior,” DiSanto said.

The list of people Ancora is proposing to seat on the board of Norfolk Southern include John Kasich, former Republican Ohio governor and congressman; Sameh Fahmy, a former Kansas City Southern railroad executive; and William Clyburn Jr., a Democrat former vice-chair of the U.S. Surface Transportation Board.

Other proposed board members include Betsy Atkins, founder of venture capital firm Baja Corp.; Nelda Connors, a former auto industry executive; Gilbert Lamphere, chairman of MidRail Corp.; Allison Landry, a former Credit Suisse analyst of railroads and transportation companies; and Barber.