Norfolk Southern nominates own board slate amid activist investor fight

Railroad nominates Richard Anderson, former CEO of Delta and Amtrak, for board
Norfolk Southern CEO Alan Shaw answers questions from AJC's reporters Kelly Yamanouchi and Michael Kanell at Norfolk Headquarters in Atlanta on Tuesday, April 4, 2023. 
Miguel Martinez /

Credit: Miguel Martinez

Credit: Miguel Martinez

Norfolk Southern CEO Alan Shaw answers questions from AJC's reporters Kelly Yamanouchi and Michael Kanell at Norfolk Headquarters in Atlanta on Tuesday, April 4, 2023. Miguel Martinez /

In response to a takeover proposal from an activist investor group, Atlanta-based Norfolk Southern on Monday nominated its own slate of board members in hopes of fending off the outside attempt to replace its management.

Norfolk Southern’s 13 board nominees include two new independent directors: Richard Anderson, former CEO of Atlanta-based Delta Air Lines and Amtrak; and Mary Kathryn “Heidi” Heitkamp, a former U.S. Senator from North Dakota.

The battle Norfolk Southern faces over control of its board and management now involves a number of high-profile executives from Atlanta-area companies.

Ancora Holdings Group, an Ohio-based investment firm, proposed in a presentation to investors last week that former UPS Chief Operating Officer Jim Barber replace Norfolk Southern CEO Alan Shaw. Barber retired from Sandy Springs-based UPS in 2020. Ancora also proposed an alternate slate of eight people to be named to what is currently Norfolk Southern’s 15-member board.

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 so far has caused the company to tally more than $1 billion in charges for its response.

Norfolk Southern in a press release Monday said it rejected Ancora’s slate of eight nominees “as well as its short-sighted strategy.” It has not yet set a date for the annual shareholder meeting where stockholders will vote on board members.

Norfolk Southern has nominated 13 director candidates. The railroad previously had 13 board members, then last year appointed two additional independent members, in anticipation of the planned retirement later this year of two existing board members, former Indiana governor Mitchell Daniels Jr. and business executive Michael Lockhart, who have reached the mandatory retirement age and will retire from the board.

Two current members of the board, longtime Atlanta business executive Thomas Bell and retired coal company executive Steven Leer, are not standing for reelection. Anderson and Heitkamp would succeed them, if approved by shareholders. The other current board members are on Norfolk Southern’s proposed slate, including Shaw.

“We are open-minded to all opportunities to enhance shareholder value and are committed to overseeing and holding our management team accountable,” said Amy Miles, independent chair of Norfolk Southern’s board, in a written statement. “We are confident that the continued execution of our balanced strategy — under the vision and leadership of Alan Shaw — is critical as we prioritize operational rigor, safety, and service. It is imperative the company continues to execute on its strategy, without interruption or interference, for the benefit of shareholders, customers, communities, and the industry.”

According to Miles, Norfolk Southern’s board has had discussions with Ancora and its board nominees and said “we have determined that none of them possess skills or experience that are not already well represented among our board nominees.”

“Further, it would be highly disruptive to our operations, our workers, and the North American supply chain to replace a majority of our well-functioning board, which we have refreshed in a thoughtful and intentional manner over the last several years in order to adopt Ancora’s short-sighted strategy,” Miles said. “The board is unanimous in rejecting Ancora’s candidates and remains unwavering in its commitment to act in the best interests of all shareholders.”

After Norfolk Southern unveiled its board candidates, Ancora released a statement criticizing the railroad.

“Since Mr. Shaw and his boardroom allies have no credible plan and no viable record to run on, it makes sense that they would initiate a weak and reactionary refresh,” the statement said. It explicitly called out Norfolk Southern’s decision to nominate Anderson, the former Delta chief who also oversaw Amtrak through rail incidents during his tenure with the passenger railway.