CLEVELAND — Activist investor Ancora Holdings Group, which seeks to oust current Norfolk Southern CEO Alan Shaw, would replace him with former United Parcel Service President Jim Barber Jr., the investment group said today in announcing its slate of eight candidates for the company’s board of directors.
Jamie Boychuk, former CSX executive vice president of operations, would become NS chief operating officer.
In a statement accompanying the release of its slate of candidates and managers, as well as a presentation making its case for the proxy fight, Ancora argued that the railroad “has suffered for years due to its board’s poor decisions with regard to the company’s leadership” and said NS’ “status as the worst Class I railroad has been solidified by leadership delivering industry-worst operating results, sustained share price underpeformance, and a tone-deaf response to the devastating East Palestine, Ohio, derailment. … Our slate and proposed management team believe they 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.”
Ancora also said it will, “in the coming weeks,” deliver a second presentation with a 100-day transition plan and its network strategy for the railroad.
Barber, who is also one of the eight board candidates, spent 35 years at UPS, was president and chief operating officer from 2018 to 2020. According to Ancora, he is credited with leading much of UPS’ growth, and has negotiated scores of effective labor agreements while overseeing safety initiatives.
Boychuk departed from CSX suddenly last August; no reason was given, but the railroad thanked him for his role in implementing precision scheduled railroading [see “CSX parts ways with chief operating officer,” Trains News Wire, Aug. 4, 2023]. Ancora cited that acknowledgement in its Boychuk biography, also noting that he had previously “worked directly with industry legend Hunter Harrison” and, while at CSX, “led a variety of operational initiatives during a period in which the railroad improved performance across all operating metrics and unlocked significant value for shareholders.”
Independent analyst Anthony B. Hatch says Barber “seems to have a strong resume but is not a railroader, so would have to lean hard on the proposed COO, who is not without controversy.” He also characterized the board candidates as “not super strong … a lot of old familiar faces.”
Those board candidates, along with Barber, include William Clyburn Jr., a former member of the Surface Transportation Board and current principal at Clyburn Consulting; Sameh Fahmy, former executive vice president of precision scheduled railroading at Kansas City Southern, who previously held positions at CSX and Canadian National; former Ohio governor John Kasich; Gilbert Lamphere, chairman of MidRail Corp. and cofounder of MidSouth Rail Corp., a former board member at CN and CSX, former chairman of Illinois Central, director of Florida East Coast Railway and Patriot Rail; Allison Landry, who spent 16 years as lead equity research analyst at Credit Suisse for the U.S. transportation sector; Nelda Connors, a former auto industry executive and CEO and founder of investment company Pine Grove Holdings; and Betsy Atkins, a corporate governance expert and three-time CEO.
Norfolk Southern, in a lengthy statement issued this afternoon, said members of the board and management had held multiple meetings with Ancora representatives “to better understand their views and communicate Norfolk Southern’s perspectives on the execution of our strategy. The railroad also said members of its Governance and Nominating Committee and board had, “at Ancora’s request, and in accordance with the board’s normal process … carefully evaluated and interviewed all of Ancora’s nominees.”
The railroad said the board will continue its review of Ancora’s nominees and present its formal recommendations in the proxy statement to be filed with the Securities and Exchange Commission and mailed to all stockholders eligible to vote in the 2024 annual meeting. The date for that meeting has not yet been announced.
The plans by Ancora, which has a $1 billion stake in Norfolk Southern, to challenge the railroad’s current leadership were first reported in a Jan. 31 Wall Street Journal story. The investment group said it had met with railroad officials over disappointment with the railroad response to East Palestine and its failure to meet financial targets [see “Report: Activist investor group aims to oust Norfolk Southern CEO …,” News Wire, Jan. 31, 2024].
— Updated at 10:30 a.m. CT with Hatch comments; updated at 5:30 p.m. CT with Norfolk Southern statement.
A recent CSX employee said Boychuk was the most despised manager in the history of CSX, by rank & file and management up & down the line! His philosophy is/was truly scorched-earth! EHH took CSX stockholders for $40M, didn’t he? What did he deliver? Many of us wonder how he behaved when Boychuk was with Joe Hinrich when Joe took him on the first “re-incarnated” Clinchfield Santa Claus Train!
I’ll vote no with my few shares. Please join me.
I’m not a Railroad exec by any stretch, but that list of players feels a lot like a “good old boys (and girls)” club with a lot of “thank-you” positions. Like @John Pinckney says below – customer satisfaction is the true measure and, while I may be missing something, I don’t see a lot of customer satisfaction in the list outlined in the article.
EHH and PSR = Failure.
Mr. Shaw tried.
Remember the Titanic? The owners wanted full speed ahead in an iceberg field. No delays.
That didn’t work out to well.
EHH may be gone. But his PSR is the gift that keeps on giving.
As long as you’re not a customer whose service needs vary… Or, an employee. Or, a stockholder.
PSR exists because early in his career, EHH had the hell scared out of him because early in his career, a superior told him that his definition of “good business” was wrong. And, backed it up with weak logic. Unfortunately, EHH believed him, took it as Gospel and ran with it. Problem is, Operating Ratio doesn’t tell the whole story of a railroad as a business.
A railroad -like any business- is only as successful as the satisfaction of its smallest customer.