Activist Ancora claims that NSC COO John Orr has a track record of engaging in abusive behavior.

Amidst the ongoing battle between Norfolk Southern and activist investor Ancora, allegations have surfaced regarding the conduct of NSC’s Chief Operating Officer John Orr. Ancora has raised issues regarding Orr’s past behavior, including claims of workplace misconduct involving racial and sexual discrimination.

According to Ancora, John Orr’s hiring involved a significant buyout package, drawing criticism for its perceived extravagance. The activist pointed to documented instances of misconduct by Orr dating back to his tenure at Canadian National, where allegations of abusive language and mistreatment towards employees were raised. An arbitrator supported claims that Orr used derogatory language and exhibited aggressive behavior towards a female colleague.

Additionally, Ancora highlighted a lawsuit filed against Canadian National by a Black executive in 2019, citing Orr’s allegedly poor treatment of subordinates. The lawsuit alleged racial discrimination and revealed that executive coaching was provided to Orr due to his behavior. The case was settled in 2022, further adding to the concerns raised by Ancora.

In response to Ancora’s allegations, Norfolk Southern defended Orr, stating that he has a history of improving performance and operating with integrity. The company dismissed Ancora’s claims as an attempt to derail Orr’s reputation and distract from the qualifications of their suggested COO candidate, Jamie Boychuk.

The Ongoing Dispute and Shareholder Impact

As Norfolk Southern prepares for its upcoming shareholder meeting on May 9, the clash between Ancora and the company continues to unfold. Ancora’s efforts to bring change to the board and management team have garnered support from stakeholders like Neuberger Berman, signaling growing discontent with Norfolk Southern’s governance.

The settlement between Ancora and Norfolk Southern remains elusive, with analysts predicting a prolonged standoff. Despite settlement offers from NSC, Ancora insists on a board refresh and the removal of CEO Alan Shaw as part of any potential agreement. The board, however, has reiterated its confidence in Shaw and reluctance to entertain terms that would lead to his departure.

Despite the turmoil, Norfolk Southern’s operations have faced challenges, including a recent freight train derailment in Ohio that sparked safety concerns and political debates. The stock’s performance has remained stagnant while the broader market has seen significant gains, reflecting the uncertainty surrounding the company’s future amidst the activist pressure.

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