Alan Shaw, CEO of Norfolk Southern Airlines
Scott Mill | CNBC
Influential proxy advisory firm ISS advised on Tuesday: norfolk southern airways Shareholders backed five of Ancora’s seven board nominees and declined to endorse CEO pick Jim Barber but still described him as a “credible director and CEO candidate.”
ISS’s endorsement comes a day after Glass Lewis backed most of the activist investor’s nominees and days after two unions came out in support of Ancora’s proposed management team.
The proxy adviser recommended shareholders support CEO Alan Shaw to replace Barber for another term on the board, but in a move to condemn the National Security Council’s existing governance, it said shareholders should not support current board chair Amy Meyer Amy Miles.
Ancora is seeking to oust current CEO Shaw and newly appointed chief operating officer John Orr. The activist held Shaw responsible for the National Security Council’s historic underperformance relative to its peers and its disastrous derailment in East Palestine, Ohio, just months after he took office.
Glass Lewis, another influential proxy advisory firm, said shareholders should support Barber over Shaw in Monday’s recommendation. While neither endorsement proposes giving Ancora full control of the board, both provide dissidents with a clear mandate to implement changes.
Investors, especially passive index fund giants like Vanguard Group and BlackRock, closely monitor the recommendations of proxy advisers when deciding how to vote millions of shares. Norfolk Southern’s top three shareholders control over 16% of the outstanding shares.
ISS said in the report that it was clear that “the dissidents proposed a balanced list of qualified nominees and generally targeted appropriate management nominees.”
ISS recommends that shareholders support Ancora nominees William Clyburn, Sameh Fahmy, Gilbert Lamphere, Allison Landry and John Kasich.
Norfolk Southern’s governance problems are “most evident” in the board’s failure to communicate with investors and prioritize their “best interests,” proxy advisers said.
“As chairperson of the board of directors, Amy Myers arguably bears the greatest responsibility for this state of affairs,” the ISS report reads.
Norfolk Southern has taken steps to address investor concerns, including naming Orr as chief operating officer and adding two new directors, former Sen. Heidi Heitkamp and former Delta Air Lines CEO Richard Richards De Anderson. ISS supports Anderson’s election but says shareholders should not support Heitkamp.
“There is no evidence that Heitkamp is in any way unfit to serve, but dissident nominee John Kasich has similar supervisory and administrative experience,” the ISS report said, noting that the latter “experienced The ability to verify” facilitates compromise.
This is a development story. Please check back for updates.
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