Two government agencies have given their endorsement behind the current board of Norfolk Southern (NYSE:NSC) as the railroad engages in a proxy fight with activist investor Ancora Holdings. Last week, Ancora gained the support of shareholder proxy advisory firms Glass Lewis and International Shareholder Services along with two key railroad workers union and one of Norfolk Southern’s largest customers, Cleveland Cliffs (CLF).
But now the Department of Transportation and Surface Transportation Board are on Team NSC. In a letter on Friday to CEO Alan Shaw, the deputy assistant secretary for multimodal freight policy at the DOT praised Norfolk Southern for “meeting key safety performance indicators” and proving reliable service for its customers.
At a meeting of the North American Rail Shippers, Surface Transportation Board chairman Martin Oberman criticized Ancora’s “viciously” waged attack on Norfolk Southern and called out Ancora’s campaign against the company for the potential to “cause serious concerns to all rail stakeholders.” Oberman characterized Ancora’s plan to leave NSC with just over 13K employees as “catastrophic for our economy and stakeholders, as well as other railroads that depend on [Norfolk Southern].”
Ancora Holdings, which holds a $1B stake in Norfolk Southern (NSC) wants to replace seven NSC board members with their own nominees and oust CEO Alan Shaw in favor of former UPS COO Jim Barber. Ancora is also pushing for the appointment of turnaround expert Jamie Boychuck as COO.