Norfolk Southern Says Latest Derailment Didn't Harm Community

By Dean Seal

Norfolk Southern said a freight train derailment in eastern Pennsylvania on Saturday didn't harm the surrounding community, pushing back on barbs from activist investor Ancora Holdings.

The railroad operator said Monday morning that it responded quickly to the derailment, which reportedly left train cars along a riverbank in Lower Saucon Township but caused no injuries, and that there were no hazardous material concerns from the railcars.

"It is unfortunate that a serious situation is being used to mislead stakeholders and to advance a proxy fight narrative," Norfolk Southern said.

The Atlanta-based company is firing back after Ancora called for the termination of Chief Executive Alan Shaw over the weekend in response to the derailment. Ancora is already pushing for Shaw's ouster in a proxy fight and has named eight independent candidates to replace the current board of directors.

The Wall Street Journal reported in February that the investor group had met with Norfolk Southern in the preceding weeks and taken issue with what they view as Shaw's failure to hit operating targets. Norfolk Southern's stock price has dropped by about one-quarter from a high two years ago amid declining revenue and earnings.

Norfolk Southern said Monday that it has engaged constructively and in good faith with Ancora to avoid the proxy fight, and "remains open to any opportunity to find a reasonable resolution."

The railroad also accused Ancora of distorting facts about management compensation, particularly with a claim that the board had raised Shaw's compensation by 37% to $13.4 million. Shaw's realizable compensation was reduced by a third in 2023, and the difference between the 2023 total and 2022 total is based on the fact that he only started as CEO in May 2022, Norfolk Southern said.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

March 04, 2024 09:46 ET (14:46 GMT)

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