Norfolk Southern Replaces Operations Chief as Proxy Fight Heats Up — Update

By Dean Seal

Norfolk Southern has hired John Orr, the chief transformation officer of Canadian Pacific Kansas City, to replace its chief operating officer as a fight for control of the company heats up.

The railroad operator said Wednesday that Paul Duncan has stepped down as operations chief to pursue other opportunities. Duncan was appointed to the role at the beginning of last year, about a month before a toxic Norfolk Southern train derailment in Ohio that rattled the railroad industry.

Norfolk Southern called Orr a four-decade veteran in the industry who was key in turning around Canadian Pacific Kansas City's operations in Mexico and drove significant improvements in Canadian National Railway's performance.

The move comes as Norfolk Southern battles Ancora Holdings' efforts to oust Norfolk's board and C-suite. The activist investor has said it launched the proxy fight because the railroad has inefficient operations and failed to meet financial targets.

Norfolk Southern sent a letter to shareholders on Wednesday, urging them to vote for its slate of director nominees and saying Ancora's proposed overhaul would destroy the company's long-term value.

The railroad nodded to Orr's recruitment as a sign that the company's current leaders are steering it in the right direction.

In order to hire Orr, Norfolk Southern paid Canadian Pacific Kansas City a one-time $25 million fee to waive his non-competition agreement.

Norfolk Southern has also agreed to certain operational and commercial considerations related to the Meridian Speedway and the Meridian Terminal that will create new value for Canadian Pacific Kansas City's proposed Meridian & Bigbee Railroad acquisition.

On top of that, Norfolk Southern has agreed to limited no-hire and non-solicitation restrictions for a short list of other Canadian Pacific Kansas City employees.

Orr will remain subject to his non-solicitation restrictions. He was appointed chief transformation officer of Canadian Pacific Kansas City about a year ago and served as executive vice president of operations for Kansas City Southern for two years before that.

Canadian Pacific Kansas City said it doesn't intend to appoint a new chief transformation officer.

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

(END) Dow Jones Newswires

March 20, 2024 09:08 ET (13:08 GMT)

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