ISS endorses most of Ancora nominees for Norfolk Southern board

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107231689 1682543857646 IMG 1155r

In a recent development, ISS, an influential proxy advisory firm, recommended that Norfolk Southern shareholders support five of activist Ancora’s seven board nominees. ISS withheld an endorsement for CEO pick Jim Barber, although they described him as a “credible director and CEO candidate nonetheless.”

This recommendation comes after Glass Lewis endorsed most of the activist investor’s slate of nominees, and after two unions expressed support for Ancora’s proposed management team.

In the recommendation, ISS suggested supporting CEO Alan Shaw’s reelection to the board over Barber. ISS also advised against supporting current board chair Amy Miles, criticizing NSC’s existing governance.

Ancora is aiming to remove both CEO Shaw and recently appointed COO John Orr. The activist blames Shaw for NSC’s historic underperformance relative to peers and for a major derailment in Ohio. Glass Lewis recommended supporting Barber over Shaw in their recommendation.

Proxy advisors’ recommendations are crucial for investors, especially large passive index-fund giants like Vanguard and BlackRock. The top three shareholders at Norfolk Southern control over 16% of shares outstanding.

ISS praised Ancora’s balanced slate of qualified nominees and recommended supporting William Clyburn, Sameh Fahmy, Gilbert Lamphere, Allison Landry, and John Kasich as Ancora’s nominees.

ISS highlighted Norfolk Southern’s governance issues and criticized the board’s failure to communicate with investors and prioritize their interests. ISS suggested that Amy Miles, the board chair, bears significant responsibility for these issues.

Norfolk Southern has made efforts to address investor concerns by appointing Orr as COO and adding new directors. ISS endorsed one of the new directors, Richard Anderson, but advised against supporting former Sen. Heidi Heitkamp.

The situation is ongoing, and updates are expected to follow.

Proxy advisory firm ISS has recommended that Norfolk Southern shareholders support five of activist Ancora’s seven board nominees, including CEO Alan Shaw and a CEO candidate Jim Barber. Both ISS and Glass Lewis have suggested supporting Barber over Shaw, signaling a mandate for change. Ancora is seeking to oust Shaw and COO John Orr due to underperformance and a derailment incident. ISS criticized the current board chair, Amy Miles, for failing to communicate with investors. Norfolk Southern has made efforts to address concerns by appointing new directors and a new COO. Passive investors like Vanguard and BlackRock pay close attention to proxy advisors’ recommendations, indicating the influence of these endorsements on corporate governance decisions.

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