Norfolk Southern CEO Alan Shaw sharply criticized Ancora Holdings, the activist investor currently engaged in a proxy fight with the railroad company’s board, during an interview with CNBC’s Jim Cramer on Wednesday.
“We’ve gone to the activist, and we’ve offered a settlement — their responses have been unreasonable at the determination of our board,” he said. “Ancora’s looking for wholesale change, and our board firmly believes that is, drives, long-term shareholder destruction.”
Norfolk Southern has faced criticism over the past year after one of its freight trains derailed in East Palestine, Ohio, in February 2023 and released toxic chemicals into the soil, water and air.
Based in Cleveland, 90 minutes from East Palestine, Ancora challenged Norfolk Southern in February, aiming to add eight directors to the board and oust Shaw as CEO. Ancora has strongly come out against Shaw, saying in a presentation that he is a “30-year insider” who lacks “the strategic operating and financial experience needed to effectively oversee Norfolk Southern during this critical period.”
Ancora did not immediately respond to a request for comment.
Shaw said that the existing board is strong, and that it includes CEOs with “direct rail and transportation experience,” as well as a former admiral and rail-safety advocates. He added the board offered Ancora “a couple” of seats, but suggested the activist investor was not amenable to the offering.
According to Shaw, he’s kept promises he’s made in the wake of the derailment, saying Norfolk Southern’s safety has improved over the last year. Regulators in February recognized the company’s efforts to increase safety and said that “early data for 2023 suggest that NS was the only Class I railroad to achieve significant reductions in the rate of mainline derailments this past year.”
“We enhanced safety, we’re making it right in East Palestine,” Shaw said. “We enhanced service, and now we got that platform to really drive productivity in 2024 and really drive long term growth and shareholder value.”
