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Norfolk Southern shareholders have voted down a bid from activist investors to take control of the freight railroad's board.
According to The New York Times, Cleveland-based firm Ancora had initially sought to remove Norfolk Southern's CEO Alan Shaw, and seize control of the company, in order to slash costs and boost profits. Ancora reportedly sought to switch Norfolk Southern to a leaner operating model that would have cut back on the number of workers, locomotives, and railcars at the railroad.
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Shaw had pushed back against Ancora's plan in the lead-up to the May 7 shareholder vote, arguing that it would threaten safety improvements made by the railroad following a controversial derailment in East Palestine in February 2023. The company previously estimated that the derailment cost it nearly $1 billion in clean-up expenses, after toxic chemicals carried by the train were released into the surrounding air, soil and waterways.
“Norfolk Southern has persevered through several challenges over the last year. We have met every challenge and never lost sight of where we are taking our powerful franchise,” Shaw said during the shareholder meeting leading up the vote. “We are keeping our promises, and delivering tangible results, and there is more to do.”
While shareholders ultimately struck down the activist firm's attempt to wrest control from Shaw, they still voted to install three directors from Ancora on Norfolk Southern's board.
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