Norfolk Southern Corp. has strongly rejected the demands of an activist investor who is pushing for the removal of the railroad operator’s CEO following a recent derailment incident in eastern Pennsylvania involving three trains.
National Transportation Safety Board Investigation
The National Transportation Safety Board (NTSB) is currently investigating a collision and derailment that took place with Norfolk Southern’s trains over the weekend. This incident resulted in train cars being derailed along a riverbank in Lower Saucon township, near Bethlehem, Pa. Thankfully, there were no reported injuries or hazardous-materials concerns during this event, as confirmed by Norfolk Southern.
According to a statement released by the company, Norfolk Southern’s crews and contractors are actively working at the derailment site. Site cleanup and track restoration efforts commenced on Sunday afternoon following the release of the site by the NTSB back to the company. Norfolk Southern expressed its full commitment to supporting the NTSB’s investigation and emphasized its dedication to enhancing safety measures in the wake of such incidents.
Previous Incidents Highlight Safety Concerns
This recent derailment incident comes on the heels of a similar event in early 2023 when a Norfolk Southern train derailed in East Palestine, Ohio, drawing national attention to rail safety issues.
Norfolk Southern remains resolute in its efforts to address these challenges and prioritize the safety of its operations moving forward.
Ancora Holdings Group Calls for CEO’s Termination
Ancora Holdings Group, a major stakeholder in Norfolk Southern, has demanded the immediate termination of Alan Shaw, the railroad operator’s CEO, in light of the recent derailment. The group emphasized that such incidents were drawing national news coverage and causing embarrassment to the railroad, suggesting that the Board’s efforts to support Shaw were unsustainable.
Takeover Bid by Ancora Holdings
Ancora Holdings recently initiated a takeover bid for Norfolk Southern, prompting the railroad operator to advise its shareholders against accepting the offer.
Norfolk Southern’s Response
In response to the activist investor’s call for Shaw’s removal, Norfolk Southern defended its CEO. The company expressed concerns that a change in leadership could disrupt operations, impact workers, and affect the North American supply chain. Norfolk Southern reiterated its commitment to a balanced strategy focused on safe service, productivity enhancement, and sustainable growth.
The company’s shares experienced a 1% increase on Monday, surpassing the S&P 500 index’s gain of 0.2%.
UBS Upgrades Norfolk Southern to Buy Rating
On Monday, UBS upgraded Norfolk Southern to a buy rating from neutral and raised its price target to $302 from $238. According to UBS analyst Thomas Wadewitz, the upgrade was due to the expectation of stronger performance in Norfolk Southern’s merchandise network.
