Alan Shaw, CEO, Norfolk Southern
Scott Mlyn | CNBC
Influential proxy advisory agency ISS advisable on Tuesday that Norfolk Southern shareholders help 5 of activist Ancora’s seven board nominees, withholding an endorsement from CEO choose Jim Barber however describing him as a “credible director and CEO candidate nonetheless.”
ISS’ endorsement comes in the future after Glass Lewis endorsed most of activist investor’s slate of nominees and days after two unions got here out in help of Ancora’s proposed administration group.
The proxy advisor advisable shareholders help CEO Alan Shaw’s reelection to the board over Barber, however in a rebuke of NSC’s current governance, it mentioned shareholders shouldn’t help present board chair Amy Miles.
Ancora is looking for to oust each present CEO Shaw and newly appointed COO John Orr. The activist holds Shaw accountable for NSC’s historic underperformance relative to friends, and for a disastrous derailment in East Palestine, Ohio, only a few months into his tenure.
Glass Lewis, the opposite influential proxy advisory agency, mentioned shareholders ought to help Barber over Shaw in its suggestion Monday. Whereas neither endorsement suggests giving Ancora full management of the board, each present the dissident with a transparent mandate to implement change.
Buyers, particularly passive index-fund giants like Vanguard and Blackrock, pay shut consideration to proxy advisors’ suggestions when deciding tips on how to vote their thousands and thousands of shares. The highest three shareholders at Norfolk Southern management greater than 16% of shares excellent.
ISS mentioned in its report that it was clear “that the dissident has offered a balanced slate consisting of certified nominees, and has typically focused the suitable administration nominees.”
ISS recommends shareholders help Ancora nominees William Clyburn, Sameh Fahmy, Gilbert Lamphere, Allison Landry and John Kasich.
The proxy advisor mentioned that Norfolk Southern’s governance issues had been “most evident” within the board’s failure to speak with traders and prioritize their “finest pursuits.”
“As board chair, Amy Miles arguably bears probably the most accountability for this state of affairs,” ISS’ report learn.
Norfolk Southern has taken steps to handle investor considerations, together with appointing Orr as COO and including two new administrators, former Sen. Heidi Heitkamp and former Delta CEO Richard Anderson. ISS endorsed Anderson’s election however mentioned shareholders shouldn’t help Heitkamp.
“There isn’t a proof suggesting that Heitkamp is in any approach unfit to serve, however dissident nominee John Kasich has comparable regulatory and administrative expertise,” the ISS report mentioned, mentioning the latter’s “confirmed capability” to foster compromise.
This can be a growing story. Please verify again for updates.
