Norfolk Southern Corporation NSC
Norfolk Southern is the worst-performing Class I railroad under Alan Shaw; replacing the Board and installing UPS/CSX operators to run PSR closes the 780bps OR gap and unlocks $420 per share.
Thesis
Norfolk Southern is the worst-performing Class I railroad in North America, with a 67.4% operating ratio — 780bps wider than CSX and 630bps above peers — delivering a -1.9% one-year TSR while CSX returned 17.1%. CEO Alan Shaw, a 30-year insider promoted from CMO in 2022, abandoned Precision Scheduled Railroading for his 'resilience' TOP|SPG strategy, missed six of eight quarterly EBIT consensus estimates, presided over the East Palestine derailment, and was rewarded with a 37% pay hike to $13.4 million. Ancora proposes replacing seven directors with nominees including former Ohio Governor John Kasich, installing ex-UPS COO Jim Barber as CEO and ex-CSX operations chief Jamie Boychuk as COO, and implementing PSR — the same playbook that transformed Canadian Pacific under Hunter Harrison and CSX under Mantle Ridge. Base case: $420 per share versus $246 current.
SCQA
Norfolk Southern is a Class I freight railroad with an eastern U.S. footprint nearly identical to CSX, operating the same geographic network, track miles and freight mix as its closest peer.
Under CEO Alan Shaw, NSC has abandoned PSR for a 'resilience' strategy, delivering the worst operating ratio among Class I rails (67.4%), the East Palestine derailment, and a $17bn market-value gap versus CSX.
Elect Ancora's seven independent nominees, replace Shaw with former UPS COO Jim Barber as CEO and former CSX operations chief Jamie Boychuk as COO, and implement a full PSR-powered network redesign.
Base case of $420 per share versus $246 current — roughly 71% upside — driven by 700-1200 bps of OR improvement to 55-60%, plus volume recapture, pricing, and valuation re-rating.
The three reasons
- 1
NSC has worst-in-class 67.4% operating ratio, 780bps wider than CSX with identical footprint
- 2
Shaw abandoned PSR and missed six of eight EBIT consensus estimates as CEO
- 3
Replace Board to install ex-UPS COO Barber, ex-CSX PSR operator Boychuk, unlocking $420
Primary demands
- Elect Ancora's seven independent director nominees via the BLUE proxy card at the 2024 annual meeting
- Replace CEO Alan Shaw with former UPS COO Jim Barber
- Install former CSX EVP of Operations Jamie Boychuk as COO
- Abandon the 'resilience railroading' / TOP|SPG strategy and implement full Precision Scheduled Railroading (PSR) with a network redesign
- Drive operating ratio to 62-63% in year one, 60% in year two, 57% in year three, 55% thereafter
- Restructure executive compensation to minimize base salary and tie the majority of pay to performance
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- Canadian Pacific transformation under Pershing Square / Hunter Harrison (2012) — 210% TSR, OR from 81.3% to 66.8%
- CSX transformation under Mantle Ridge / Hunter Harrison (2017) — 104.6% TSR, OR from 70.6% to 58.4%
- Ancora prior campaigns at Mueller, Berry Global, and RB Global
Notable slides (6)
Notes
193-page full proxy deck for the 2024 NSC annual meeting. Campaign operates under a custom 'Move NSC Forward' brand (dedicated logo, website movensscforward.com). Structure: Executive Summary (p.4-26), Case for Change (Financial / Operations / Safety / Governance p.27-94), Solution — New Board & Management (p.95-131), Plan to Move NSC Forward (p.132+). Precedent playbook is core — Pershing Square/CP and Mantle Ridge/CSX both cited with indexed TSR charts. Activists nominated 7 directors including former Ohio Governor John Kasich, ex-KCS/CN railroader Sameh Fahmy, former CSX director Gilbert Lamphere, XPO director Allison Landry, Betsy Atkins, James Barber Jr., and William Clyburn Jr. Stake percentage not disclosed on sampled pages (described as 'meaningful equity stake'). Value bridge on p.25 is a multi-driver share-price waterfall, not a business-segment SOTP, so contains_sum_of_parts = false. Tone is sharply adversarial against CEO Shaw and Chair Miles, with detailed personal attacks on compensation and insider selling (p.68-70).