News & Reviews News Wire NS nominates two new board members, rejects activist investor’s ‘short-sighted strategy’

NS nominates two new board members, rejects activist investor’s ‘short-sighted strategy’

By Bill Stephens | February 26, 2024

Former Amtrak and Delta Air Lines CEO Richard Anderson and former North Dakota Sen. Heidi Heitkamp were nominated to serve on the NS board

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Norfolk Southern merchandise trains pass at Cassandra, Pa., on the former Pennsylvania Railroad main line, in April 2022. Bill Stephens

ATLANTA — Amid its proxy fight with an activist investor, Norfolk Southern today nominated former Amtrak and Delta Air Lines CEO Richard Anderson and former U.S. Sen. Heidi Heitkamp to serve on the company’s board of directors.

The NS board also confirmed its unanimous support for CEO Alan Shaw and the railroad’s “better way forward” strategy.

“As a board, our priority is ensuring we have the right composition to guide Norfolk Southern in improving operating performance, enhancing safety, delivering value for our customers and shareholders, and fulfilling our commitments to our stakeholders,” independent board Chair Amy Miles said in a statement. “Our focus on meaningful refreshment — evidenced by the two new directors added in 2023 and two new nominees presented for the 2024 annual meeting — reflects these strategic priorities and our commitment to strong governance and oversight.”

Richard Anderson is the former CEO of Amtrak and Delta Air Lines.

NS also rejected Ancora Holdings’ control slate of eight board nominees as well as what it called Ancora’s “short-sighted strategy.”

“Recklessly chasing cost reduction at the expense of safety and service is not a winning strategy for creating sustainable shareholder value,” NS said in a statement. “Norfolk Southern’s customers, regulators and employees have made it very clear — they will not tolerate service declines and safety lapses in pursuit of extreme near-term cost reductions. As articulated by key regulators, the approach Ancora has outlined, given the track record of certain of its board and management candidates, should be a serious cause for concern among all stakeholders who support the long-term growth and sustainability of the rail industry.”

Former U.S. Sen. Heidi Heitkamp, D-N.D., was nominated to serve on the Norfolk Southern board of directors.

NS said it will improve productivity in its merchandise network this year, which will reduce variability, complexity, and cost. The railroad also is reviewing its intermodal business to identify opportunities to simplify and accelerate the network, which will improve its operating margins.

The NS board remains committed to holding the railroad’s management team accountable, Miles said.

“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,” she said. “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.”

The NS board has met with Ancora representatives and its board nominees. “We have determined that none of them possess skills or experience that are not already well represented among our board nominees,” Miles said. “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. The board is unanimous in rejecting Ancora’s candidates and remains unwavering in its commitment to act in the best interests of all shareholders.”

Current NS directors Thomas Bell and Steven Leer will not stand for re-election at the annual meeting, while two other directors, Mitchell Daniels Jr. and Michael Lockhart, have reached the mandatory retirement age.

Ancora called NS’s proposed board changes “a weak and reactionary refresh.” In a statement, Ancora also was critical of Anderson, claiming that running an airline and presiding over safety incidents at Amtrak “has no place on the board.”

— Updated at 12:25 p.m. CT to correct Heitkamp’s party affiliation.

15 thoughts on “NS nominates two new board members, rejects activist investor’s ‘short-sighted strategy’

  1. Is it me, or does having board members from an airline and from a state nowhere on the NS system seem just as ill-thought as these Ancona nominees?

    1. Yeah, Delta Dick is supposed to save NS from the raiders at the gate, the bad people who are like —— Delta Dick.

  2. Good for NS for rejecting Ancoras proposal. I think NS has a good plan moving forward.
    I agree that Kalmbach should drop the anoying pop up videos.

  3. Not happy about “Delta Dick” but very happy about Mr Shaw keeping his job. Hopefully this will work out well for all involved. As for Ancora, well my mom always said if you can’t say something nice about someone don’t say anything at all. I will listen to mom.

  4. I’m glad Shaw is staying but nominating the despotic Delta Dick to the board?
    Look at the damage he did at Amtrak, Delta and Northwest. Amtrak is still suffering from Andersons flexible dining, unstaffing stations, restrictions on private car movement, canceling charter moves like Toys for Tots, prices of train tickets sky rocketing to name a few.
    His destruction of Amtrak continues today with his stooge Gardner still under Andersons thumbs.
    Not to mention Coscia who not only hired Anderson but gave his approval to Andersons destruction.
    To add insult to injury, the Senate renominated Coscia to the board so once again it’s Red Sky at Morning.

    1. Shaw is not safe yet. It unfortunately is not up to the board in this case but the Share Holders. Hopefully a mutual fund will come out in Shaws favor

  5. I think it would be fair to say that Anderson is universally reviled by those who follow Amtrak’s meanderings. If I were an NS stockholder, would I be duped for the second time into thinking that if he could run an airline, the skills must transfer seamlessly to a railroad? Is NS “meaningfully refreshing” its Board with this short-sighted cost cutter? (Side note to Kalmbach re the recent site maintenance: could you please dump the automatically-refreshing popups? Very annoying.)

  6. I like the statement made by Amy Miles about her meeting with the people from Ancora Holdings’. Let NS be NS, it’s in good hands.

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