Yahoo Finance UPDATE 1-Ancora scores in Norfolk Southern proxy fight with Glass Lewis recommendation
(Adds details from report, background)
April 29 (Reuters) - Ancora Holdings scored a victory in its battle with Norfolk Southern on Monday when proxy advisory firm Glass Lewis recommended investors in the railway replace its CEO and others with six of the activist investor's board director candidates.
Glass Lewis said that CEO Alan Shaw and other long-serving directors shoulder much of the blame for Norfolk Southern's underperformance and that it is time for a board shake-up.
"Ancora has presented a compelling case for supporting a substantial overhaul of the Company's current leadership," said the Glass Lewis report, which was seen by Reuters.
Ancora is seeking to replace Shaw with Jim Barber, a former United Parcel Service executive, who Glass Lewis said had "compelling credentials". It recommended shareholders withhold support from Shaw.
Norfolk has rejected all of Ancora's nominees saying they would not bring fresh skills or experience, but proposed plans in February to add two new directors to its board.
Glass Lewis and its bigger competitor, Institutional Investor Services (ISS), can help guide investors on how to vote in board elections and mergers among other issues.
ISS has not yet made its recommendation.
The proxy fight is one of the year's most hotly contested board challenges and will be decided at the railway's May 9 annual meeting unless the two sides reach an agreement first.
The railway has been criticized for derailments and Glass Lewis said it can make improvements in it is workplace safety culture. A number of unions have publicly backed Ancora's bid.
Norfolk on Monday contested the Glass Lewis recommendation.
"The flawed report overlooks the fact that Norfolk Southern's board has been an agent of change to advance shareholders’ interests, executed significant corporate governance enhancements, and directed transformational initiatives that continue to improve safety and operational performance," the company said.
Ancora said it appreciated the Glass Lewis report.
U.S. steelmaker Cleveland-Cliffs, a Norfolk customer, also backs Ancora, Bloomberg News reported on Sunday. (Reporting by Deborah Sophia in Bengaluru and Svea Herbst-Bayliss in Boston; Editing by Shounak Dasgupta and Alexander Smith)
