Ancora continues to criticize NS, Shaw

EAST PALESTINE -- A group of investors led by Ohio-based Ancora Holdings Group continues to call out Norfolk Southern's Board of Directors and CEO Alan Shaw for its handling of last year's train derailment and what it called "a deaf-tone" response.

The group, which holds a $1 billion stake in the railroad, penned an open letter to Norfolk Southern Chair Amy Miles questioning the decision to give Shaw a pay raise in the wake of the derailment and continues to step up its efforts to replace Shaw the NS board of directors.

"We made clear that your current CEO has presided over industry-worst operating results, sustained share price underperformance and an ineffective and tone-deaf response to the preventable derailment in East Palestine, Ohio," the letter to Miles states.

According to published reports Shaw was given a 37% pay boost following the train derailment and chemical release with $13.4 million in total compensation in 2023 - including a base salary increase to $1.1 million. Norfolk Southern reported a loss of and a 44% overall net income loss in 2023. Shaw became CEO in May of 2022.

"It is astonishing to us that the Board would reward Mr. Shaw with a 37% increase in the value of compensation to a total of $13.4 million for a year in which the company's customers, employees, shareholders and community partners all suffered," the letter argues. "This figure includes more than $10 million in stock and option awards, which were granted to Mr. Shaw even though he missed all six annual incentive targets pertaining to financial performance, customer service and safety. To add insult to injury, Mr. Shaw appears to be a major beneficiary of the 'East Palestine Adjustment' that increased Performance Stock Unit payout percentages from 56% to 96.3% of target."

The letter goes on to accuse Norfolk Southern of "pursuing a scorched-earth campaign that involves poisoning the well with key stakeholders of the railroad" and increasing lobbying efforts on Capitol Hill.

"Unfortunately, you have not responded to our prior private letter that encouraged Norfolk Southern to avoid poisoning the well with valued stakeholder," it stated. "You have also failed to address our concerns about the manner in which Norfolk Southern appears to be sending private planes to Washington, D.C. and misrepresenting our views to regulators."

Last week, the investor group announced its nomination of eight for election to the NS Board of Directors at the 2024 shareholders meeting. The nominations included transportation network leader Jim Barber Jr. as Chief Executive Officer and lifelong railroad operator Jamie Boychuk as Chief Operating Officer. Former Ohio Governor John Kasich was also among the nominees.

Norfolk Southern, who has voiced support for Shaw, responded with its own slate of 13 nominees. Among them are Richard H. Anderson, former CEO of Amtrak and Delta Air Lines, and Mary Kathryn "Heidi" Heitkamp, a former U.S. Senator.

Norfolk Southern and Ancora exchanged barbs on Monday, finding fault with the other's nominees.