Ancora-led group wants new CEO, COO at Norfolk Southern; nominates board members

By Nathan Gomes

(Reuters) -A group of investors led by Ancora Holdings on Tuesday said it had proposed replacing Norfolk Southern's top management, including its CEO, and nominated eight directors to the railroad operator's board.

The investor group, which holds a "large equity stake" in the company, aims to replace CEO Alan Shaw with former United Parcel Service executive Jim Barber and COO Paul Duncan with Jamie Boychuk, a former executive at CSX Corp.

"Since receiving Ancora's nominations, members of both the board and management team have held multiple discussions with representatives of Ancora," Norfolk Southern said in a statement.

The company added that members of the governance and nominating committee and the board carefully evaluated and interviewed all of Ancora's nominees.

Shares of Norfolk had lost nearly 5% in 2023 amid operating challenges and the fallout from a costly derailment in East Palestine, Ohio, which invited scrutiny from regulators.

"Norfolk Southern, which has exceptional rail workers and the country's best customers, has suffered for years due to its board's poor decisions with regard to the company's leadership," the investor group said.

The candidates for the board include several railroad industry veterans and former Ohio governor and congressman John Kasich.

In January, Norfolk reported its fourth-quarter profit below analysts' estimates, hurt by lower revenue across its merchandise, intermodal and coal businesses.

"Every public Class 1 railroad has been targeted by an activist since 2011. Campaigns have largely been effective, particularly at CP (2011) and CSX (2016), which transformed two of the industry's laggards into leaders," BMO wrote in a note earlier this month.

The Wall Street Journal reported late last month that the Ancora-led group had taken a roughly $1 billion stake in Norfolk Southern and had nominated a majority slate of directors.

(Reporting by Abhinav Parmar and Nathan Gomes; Editing by Tasim Zahid and Maju Samuel)