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ISS supports the majority of Ancora’s picks for the Norfolk Southern board.

The ongoing battle for seats on the Norfolk Southern board has seen support from influential proxy advisory firm ISS for the majority of Ancora’s board nominees. ISS recommended that shareholders back five of the activist group’s seven nominees, including favorites like William Clyburn, Sameh Fahmy, Gilbert Lamphere, Allison Landry, and John Kasich. However, ISS withheld its endorsement for CEO pick Jim Barber, although acknowledging him as a credible director and CEO candidate.

Interestingly, ISS’ recommendation closely follows a similar endorsement from Glass Lewis, another significant proxy advisor. Glass Lewis also supported a majority of Ancora’s picks, suggesting that change is needed on the NSC board. The dissident shareholders are pressing for a shakeup in leadership, aiming to remove CEO Alan Shaw and newly appointed COO John Orr. They hold Shaw responsible for NSC’s underperformance compared to its peers and a significant accident in Ohio during his early tenure.

In contrast to ISS’ stance, which favored keeping CEO Alan Shaw over Barber, Glass Lewis recommended supporting Barber for the position. While neither advisory firm advocated for Ancora to take full control of the board, both calls for change provide a clear directive for the dissidents. Given the significant stakes held by top shareholders like Vanguard and BlackRock, the proxy advisors’ recommendations hold substantial weight in shaping the upcoming vote.

One point of contention highlighted by ISS was NSC’s governance issues, particularly the board’s failure to engage effectively with investors. ISS specifically called out board chair Amy Miles for her role in the board’s lack of communication and prioritization of shareholder interests. While NSC has made some recent changes, such as appointing new directors and an additional COO to address concerns, ISS scrutinized these moves, suggesting that shareholder support should be cautious.

ISS’ assessment emphasized the need for a more collaborative approach within the board, pointing to John Kasich’s experience in fostering compromise as a strength. While ISS endorsed former Delta CEO Richard Anderson’s election, it advised against supporting former Sen. Heidi Heitkamp, citing Kasich’s regulatory and administrative expertise as more aligned with the board’s requirements. The proxy advisor’s thorough analysis reflects the complexities at play and the critical decisions facing Norfolk Southern and its shareholders.

This evolving situation underscores the importance of investor engagement and oversight in corporate governance. As the battle for board seats intensifies, shareholders and stakeholders alike will closely monitor developments to assess the implications for Norfolk Southern’s future direction. The competing perspectives from ISS, Glass Lewis, and other key players highlight the nuances and dynamics shaping this pivotal moment in the company’s governance structure.

Stay tuned for further updates as this story progresses.

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