Ancora set to overrun Norfolk Southern's board, yet coup de grâce remains elusive

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Ancora set to overrun Norfolk Southern's board, yet coup de grâce remains elusive

Investors, big and small, clients of all sizes, and employees are all holding their breaths, bracing for the shareholder vote that will decide the outcome of a proxy fight between the company’s current management and Ancora, an activist firm pushing for changes at the helm.

Norfolk Southern, for its part, was quick to respond, pushing back against allegations and highlighting “ The $800M cost trim is projected to bring down NSC’s operating ratio – a key railroad performance indicators calculated as a percentage ratio of operating expenses to revenue – to 62-63%, significantly lower and therefore healthier than NSC’s 2023 ratio of 67.4%.

Putting operations back on track, metaphorically and literally, has come at a cost of lower margins, but now that the dirty work is behind, management believes it is “ chieving near-term targets would require ~2,900 employee furloughs, putting service and safety at substantial risk, sparking backlash from regulators, and jeopardizing long-term shareholder valueLastly, the company is a vocal critic of the proposed new management, as it notes that the CEO candidate has no prior railroad experience, and the COO has questionable safety and operations record from his time at CSX.

 

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