Transcript
This is proxy countdown. Welcome to the Big Show for the week of April 22nd 2024 alongside my tag team partner. Matt miscarry, I'm Damian roles on today's countdown. Keurig Dr. Peppers fizzy and unhealthy CEO succession exxonmobil's anti shareholder rant. Simple majority voting proposals outperforming Caitlin Clark. Liberty energies board says no to shareholders, who also said, no and on the big vote. The proxy cage match at Norfolk Southern Corporation. Get right to our trade wire at Electronics, manufacturing company jbeil. Yo, and director, Kenneth Wilson has been placed on paid leave. Pending completion of an internal investigation. Related to corporate policies. Of course they're not telling us anything about anything. At this point Wilson has been CEO for less than a year and has two sons who were employed by the company. Jordan, Wilson is a business unit manager and Adam Wilson is a business unit coordinator. CFO, Michael dastor is now in terms, CEO, while former CEO, Mark mandelo continues as executive chair. So, that's what's going on at JBL? Keurig Dr. Pepper's do over succession plan will be complete tomorrow. April, 22nd April 26th, as Robert gamgort. Will step down from his position as CEO once again. But remain with the company as executive chair, the new CEO will be Timothy kofer Who was getting a golden, hello bonus, consisting of seven million dollars in equity in 8 million dollars in cash, the latest change follows a botch CEO succession in 2022. When Gambler first tried to step down that plan was thwarted. However, when the newly named CEO ozone Macho glue suddenly stepped down forcing board to be reappointed as a CEO. Know members of Keurig Dr. Pepper's board were held accountable for this, which may be one of the severe limitations of a combined CEO and chair. Or a board where the chair is an executive and a former CEO. Yeah. Um, He was the first time the executive chair. Also right? Yes, well yeah, he was he was CEO and chair. He tried to transition to Executive chair and then he had to go back to being CEO and chair. Maybe the problem is Hit that he's still around. Maybe the problem is no way. He's overseeing the board that oversees himself and the succession planning at Keurig Dr. Pepper, Let's keep running list of problems, Avalon Bay communities directors, Susan, Swansea joined the board at digital Realty, Trust and B&G Foods, director, Deborah, Martin, Chase replaces Joanne apps on the gaming and Leisure properties board. Joanne Epps passed away in September. Those are our lead stories and the trade wire. Let's move over to our proxy cage matches. Well it's not exactly a proxy cage match. Our big vote at Norfolk, Southern is our proxy cage match for this week. I wanted to mention the ongoing battle at ExxonMobil, where management and directors continue to berate shareholders. As part of the company's 2024 proxy statement, the board, dedicated to full three-page preface to which 2024 Sherlock proposals, which we've never seen before explaining why it hate shareholder. Proposals, despite claiming to quote support and encourage and investor engagement and advocacy. This highly unusual move follows the controversial tactic taken by X on earlier this year to sue. Its shareholders are Juna, capital and follow this rather than leveraging this sec's. No action process which is how you normally deal with share the proposals that you don't like at first glance. Exxon Mobil, blame that decision to see what shareholders on the quote ongoing abuse that businesses across all Industries experience from the misuse of proxy proposals. Other highlights in this three-page, preference include the following complaints. That over the past two years, proposals have been submitted to ExxonMobil seeking more than 19 new reports, including 13. Such proposals that are or were on topics the company already covers in its reporting. That 140 proposals have been submitted since 2014 50, 50% of, which are by serial proponents, that's its term. And Matt that up to 21 million dollars in direct cost to the company are having courage because of these proposals. Although, this figure is not actually based on EXO Mobile's own accounting, but was conjured instead based on SCC estimates of up to 150,000 dollars per proposal. So this isn't actually the number that the company actually spent. It's doing some Fuzzy Math. I like that, right? Not only none of the doing the fuzzy math here. Do we don't know what they really found this. It's 21 million since 2014, one year of the executive of the CEO's compensation, and I can promise you that if x on spent even a penny over that 21 million dollar figure, it would have reported that and would have not taken this earned income credit that we all take when, you know, when the when we're doing our taxes and our charitable deduction blah, you know, I'm trying to say excellent also calls out. The interface Center on corporate responsibility. That's iccr proxy impact. And as you sow among others, saying that Many of the proponents and representatives work with each other or other activist organizations and hijack. The shareholder proposal process to advance their own agenda which often conflicts with growing investors value. Blah blah. Yeah, go ahead. One of the best responses by iccr is actually a chart that shows The just the since 2017, the number of climate-related shareholder, proposals that got more than 30%. Yes, votes from investors already. Get 30%. Yes, votes you need actual support, you can't do that in a vacuum and there's a bunch of them. I mean there were four since 2017 that crossed the 50% threshold. So clearly as much complaining vetting as Excel wants to do and suing their shareholders shareholders, largely agree that these reports are useful at less than the cost of a single year of CEO salary. I don't understand this and the worst part about it to me. Is that on the board of Exxon is Jay hooley who was the ex CEO of State Street? One of the largest investors in the entire world who suing investors for putting up shareholder proposals what do we do it? Jay? What are you doing? Why are you even? Why is this, even a conversation? You should end your tenure on the Exxon board immediately. As soon as they attack shareholders that you were, you were that shareholder State Street? You don't get to greater than 50% on a proposal. If State Street isn't one of the, the companies voting for it, meaning you want shareholders to stop doing proposals that you agreed to most likely in the past, you need to get over yourself. You can't. Okay, this from axons management either step down or release a statement that says, I'm not on board with this. Even if they're doing it. Let's move over to our vote results. Table season is in full swing, but let's before we get to our large cap companies, let's start with a ridiculous director vote at a smaller cap company. Shareholder said no to director Ken Babcock a majority 51% voting against his re-election. The board. However, quote determined that Mr. Babcock's continued service on the board is in the best interest of the company and its stockholders. B, it in the best interest of the same shareholders that just voted out the director, on top of that. The board actually attempted a feeble, excuse for for babcocks failed reelection. Citing quote, a recommendation, from a proxy advisory firm to withhold votes based on its disagreement, with the company's classified board structure and a 2/3. Stockholder vote to remove super majority Provisions. I don't understand that excuse and why? Because because why, then did shareholders reelect both CEO. Chris Wright and director. Audrey Robertson. Robertson were also up on the vote this year, CEO, Chris Wright is also the board's chair. So that's seems like a better Target if you're upset a board proceedings and RG Robertson serves at CFO at a company that engaged in 200 million dollars in related party, Trent auctions with liberty in 2023. So despite that shareholders, really did seem to want to remove Ken and Babcock. Let's be clear here this Be the weirdest protest vote ever like, like they picked. The one guy who makes no sense to protest. I'm not saying no, no, I'm not saying they didn't have a reason. I'm just saying that they, they had other reasons. It's not because yeah, exactly. But that's what I mean. Yeah. Like it would make those sense you. Like, you clearly have something to protest against that guy. It's I find it odd that a company even puts an excuse in, but to have a fail to excuse, like a meaningless, gobbled Goose. Makes it even worse 20, large cap companies that we usually focus on large cap companies, here were held at ajm votes. They hit, they held a GM votes over the past week while most represented disengage and their and or happy shareholders. I use that are quotes for that. The following votes were no worthy. First, let's start with John Sheffield and simple majority vote proposals, they've been on quite a role. Recently, passing a Humana with 51% support passing at the Sherwin-Williams company with 701% of the vote and About this one, a huge victory at revity for simple majority vote, share The Proposal with 96% support. Wow. Despite the board recommending against the proposal. I don't understand that one at all. How is that possible? I don't know. I mean like that. Do we know what glass Lewis and ISS recommend this matter? 90 six percent. That's a lot. That's a lot percent. Yeah and second Sam pay votes. Struggle that both carrier Global and broadcom where a 40% shareholders voted against paper. Pulls as a both those companies broadcom CEO, hock tan, received a ridiculous 162 million dollars in compensation this year after receiving a already ridiculous, 60 million dollars in both 2022, and 2021, and at carrier global Cheryl. There's probably pissed because the board snuck in and Off plan. Supplemental Equity award for CEO. David gitlin. Consisting of over 2 million shares in options with the grant date value of well over 100 million dollars. So that's what's going on. At ajm votes, that brings us to the big vote for the week of April 22nd. And that is Norfolk, Southern which Matt I know is already exhausting you were. There is a massive proxy contest going on. Um, I don't even know where to start with this one, but maybe I'll let you maybe I should let you start with. I have a few things I want to add along the way, but why don't you go? All right, this one. I mean by by way of short background, this is this is a company that has been underperforming like every possible. Yeah. CSR metric to put to put it in the context. This Norfolk Southern is the company which experience the the disastrous derailment in East Palestine, Ohio in the winter of 2023. And, and they're just been ramifications from that not only for the residents of the town, but for the company, in general, since that point, ultimately ending in a massive proxy contest from anchor Holdings, thank God for which is not only proposing a slate of directors but also is proposing a complete management reshuffle, which is they actually have nominated a majority, a new majority of the board. Know that they could get a new CEO and CEO in there, right? Like, so for Aunt Cora it's a it's a bit of a binary. You're not going to get your CEO if you don't get the majority of the board. So their whole process here is a management flip. You would flip the majority of the board. You would flip the CEO, you flip the CEO and inevitably CEO, and CEO would bring in their own people over time, you would flip the entire management team in this company, most likely in the next five years. And let me tell you why this is important. And I do want to highlight this before I forget because it all so highlights our data, our great data. So in in times of turmoil, we often see companies and Boards. Make strategic decisions that we don't quite understand, right? They they often will immediately let go of some directors often. Some long tenure directors, will immediately bring on some new directors, mostly to appease the market to a piece shareholders. But again there's no there's no actual strategy in place. They're just Kind of making knee, jerk reactions. But I want to show you what that really means in practice. So what Norfolk Southern did is it immediately retired for a lot of a better word, four of its directors. So, right. Thomas Bell, Steve and Lear Mitchell Daniels. Michael Lockhart will all be gone as of the 2024 annual meeting. And what this does. In fact is so we, we have a number, we have a quantitative data point that demonstrates, the influence of directors on the board on these boards and what it does is remove a total. I believe of. So of 37% of the board influence left. Yeah, we need to be replaced when Norfolk Southern made a decision and what it did, we ran the numbers for how the boards gonna look as of the 2024 AGM and what that did is it shifted, the power, very clearly into the hands of three, directors. In fact, it they, they used to have 29% of board influence. They will now have as a triumphant, they will. Now have exactly 50% of the boards, which means they now control the board more than they ever did before, and this is CEO, Alan Shaw, existing chair. Amy miles has been there since 2008. You know, staying and nominating, committee chair, Jennifer Scanlon who again predates that the relevant and in Ohio. So all this did was it didn't change the board. All it did is basically consolidate power into the hands of people that with management with. Right. Exactly. So yeah, this is the real effect of these types of decisions and that's why they do that, they wouldn't do that. If there wasn't a slate coming in or they didn't think that there was one coming in or there wasn't a disaster like in East Palestine, right? Like they do that in response to these things to look like there's motion on the board. What? But the real effort is maintain the status quo and just the appearance of refreshment Boeing did the exact same thing. Well, let me say this that, you know, we talked to length about CEO Alan Shaw at another one of our podcast earlier this week. We cited the article by Yale Professor Jeffrey, sonnenfeld who has a lot of praise for Your Allen shot, despite all that, despite my perspective on that article. At a minimum. I would say that if you are going to retain CEO, Alan Shaw at Norfolk Southern the sound, corporate governance move that I think Jeffrey, sonnenfeld should be pushing for if he wants to keep CEO, Alan Shaw is to immediately, remove Alan Shaw from the board that provides oversight to himself and to his the new management that he's hired because otherwise, there's just no way of ensuring that there's kind of accountability going forward, right? See Alan trust should not be on this board anymore. Let's start with the recommendation, go ahead because that is my first recommendation. First vote is no to Alan Shaw. Forget slates, forget anything else? If you want to send make a statement, send a message to management that the status quo in the old culture vibe that NSC has you and you want them to Start focusing more on safety have fewer accidents, more efficiency using data and like going into the future of railroading, then the vote has to be to remove a lifer from Norfolk Southern, who is now the CEO, he's been there since 1994 he is. And his background isn't even in the engineering and railroading part. It's in Marketing sales and some operations, right? You remove him from this board, you don't have to stop making them CEO and that's important board. And that is the important Point here to because to be clear by by voting him out of the board, you're not you know, firing him is CEO, let the new board that he doesn't decide to control the side that, right? So it's exactly. So in fact, I where I where I did speak out against on felt was that this is not a deeply personal attack. This is not a vicious way of handling corporate governance. This is actually a very sound ways way of separating the power at Norfolk Southern if anything. Thing. This might ensure a greater success for Alan Shaw, right. I mean to have a board actually overseeing his duties but yeah go ahead and the risk here is if you just removed Alan Shaw, what you're left with is a board that consolidates, his power with the chair who in this case is Amy miles, who's doing? This is strange chair, you know, 2014, she's the CEO of Regal Entertainment, she, there is no understand. In fact, when we look at the data, the qualifications that Amy miles has to sit on this board other than the fact that she's been on other boards before is that she's directly connected to second degrees. To other board members who used to be here. In fact, I would call it the wick, Mormon crew. The 2006 2015 Wick Mormon was a CEO of NSC and brought in a number of people that are all highly interconnected. In fact I referred in Norfolk Southern as the Boeing of land travel. Where you Have. CEOs who are bringing in their people who are all connected on other boards, with one another on to their boards. Amy miles is a vestigial organ of that. Yeah it's a you do not want to consolidate power with the old guard. So the other wreck of the other Top Line recommendation here is vote no to Amy miles. It's a crazy choice. I mean you're talking about a woman who as you pointed out is the CEO and chair at Regal Entertainment Group of all places and she's the chair of pharmaceutical company. Know she's the, on the board of pharmaceutical company and Jen and the gap. Yeah. I mean, this is all old fashioned logic old-fashioned, corporate guy. That makes no sense. I'm sorry, I just don't see this. I don't. And finally, I would say no to Marcella Donna, Dio, who mostly? Because I'm Pure Performance metrics. She everywhere. She's been on the board, poor, safety is the norm house, that right? Which means, and she's been on the board of a number of, you know, energy and extractive companies. Which means if you want to change culture, you need to start removing. She's also connected back to the wick, Mormon crew. You need to start removing these little pieces of old culture from The Boardroom, and from the management team. But that will happen at the board's discretion. Remember the reason why we focus so much on the board is investors are electing these people to help oversee management. Management accountable, this is your lever. You want them to represent. You not an Old Guard of American aristocracy boards where they pet themselves on the back by swapping board roles. That's not what you're looking for. And another reason why we say that article earlier this week is what it did not do. Was it did not analyze the Norfolk Southern board. No person in order to analyze the the potential incoming slate of in quora because I'm sure you'll talk about next. You know, there are some names that consider. I'm not. I'm not saying that Cheryl have to take the entire slate because really what? Yeah, because to your point Matt, if you do the very simple and logical move to boot again, you know, not firing Alan, Charles you but to remove him from the board. You don't need you, no longer need seven, dissident directors. You only that's maybe like two or three, right? Which is so I'm I my recommendation at the Top Line is vote against three of the Norfolk Southern. Directors, including the CEO is one of those things. Just take them off the board and a chair and Amy miles, and you're gonna support three and chorus. Late directors, that makes sense that actually create like, it's enough to start creating a new culture. And the people I'd recommend are Bill Clyburn Junior, who was a x regulator. He's regulatory focus on safety, Sammy Fami, which is a railroad advisory experience. So actual railroad experience on the board, bring that back in and Allison Landry, who's on the board of XPO, which is a logistics company. She's the closest thing you have to somehow some version of high-tech Logistics that you can add to the sport, I but we can get to them in a second. Underlying, these recommendations is a tremendous amount of data and Analysis. We looked at everything, we looked at all their performance metrics their connections to one another, the cultures where they came from. And what we found was well first and foremost, what we've set out to say is we can agree and Norfolk Southern needs basically less accidents. They need stronger Community buy-in. They need to be more efficient and they need better data. They need to operate on data in a way that they doesn't seem like they have in the past based on all of the metrics. I am not a railroad expert. I'm not going to talk to you about Precision, scheduled railroading, or PSR or whatever? It is, I'm not gonna talk to you about or I can talk to you about, is the performance metrics that are obvious between 2012 and 2022. Accidents, went up over 100% for Norfolk, Southern okay. Over 100%, during that time period Alan Shaw was the head of Intermodal Ops right? Like hard of his job is overseeing the operation of some of these things that those that's not refutable in Jeffrey. Sonnenfeld the Yale, professors that he met his own slide deck for all of Norfolk Southern He shows that accidents went down in 2023. Well, the accident in East Palestine happened, in February of 2023. If accidents didn't go down in February or in 2023, there would there would be not only no question. Everyone would be fired there, right? Like the only time they focused on safety and accident reduction was after the largest train accident in the United States in recent memory, right? Of course you're going to see it go down. Yeah. The reason why we're focusing a lot on this article on this that he put out in Fortune is that we couldn't quite figure out why. You know, he doesn't cite a connection to Norfolk Southern although we did we did notice that Norfolk Southern filed that article is part of themselves in as in its SEC filings. It is now officially sighted. Yes. As a document in support of its own slate of directors, it's so important to me but again we don't we're not quite clear. Why? Like, we're not well where this came from, right? Did they paid Sean fell like what's going on here? It's it hasn't been disclosed, but aunt Cora actually filed a follow-up to that in which they reached out to Saint and felled twice and they got no answer from son and felled. But they got an answer from an advisor to Norfolk. Southern basically on son and feld's behalf which they used as evidence, that there is some relationship between Norfolk Southern and Jeffery son in Philadelphia. That is not of the article. We just want to disclosure that and it's funny that you mentioned bowing at the top of the segment. Because let's not forget that it was not that this is about son and fell, but it's not forget, it was Jeffrey sonnenfeld who also wrote an article praising, David Calhoun who has now been removed, you know, we'll be removed the CEO of Boeing but praising him for his laser focus as or his words on safety at Boeing after Are all the issues habits the same situation like yeah, this is bizarre. It's really bizarre. Is honestly Cult of like the big swing in US CEO. There's some weird cult going on and they all are highly interconnected which I think is part of this, right? Like the Jeffrey sonnenfeld to the world whether or not it's him or someone else, there is a certain beholden industry. He's the he's doing Management training of CEOs and Executives. And if you ostracize yourself from that those circles, right? It's gonna be really hard to access them. So even if there was just a social impetus, there's some clear impetus to protect these CEOs, but in this case, it largely isn't warranted unless again, unless he's, you know, there is some disclosure that will come out that he's working for the company. But again, the reason why we stayed to these shows and stayed to This research, is that we are trying to demonstrate that there is a quantifiable approach to these arguments. It doesn't have to just be Based on your feelings or who you like or who you've talked to behind the scenes. I mean, there are, there are ways of creating a strategy based on an actual like analytics in creating A New Path forward for these boards, right? Other than then, like ISS saying that, you know, we we think this one's better or we think that one could be better or perhaps this person is smarter perhaps. Yeah I go ahead. Well in this case right? We could start with the management themselves, right? Because one of the questions that we asked all the time is what are the skills of the people involved. And we'll ask other management of the board and we'll say are these the people that we want to bring this company into the future, we should ask that every single election, that's what you ask when you vote for president or Governor or your local Town Council, right? Is this the person that I want to represent me into the future? And in this case, it may not be because when you look at the executives and and What their skills are what their backgrounds are. Just even by title. They are super heavy at Norfolk, Southern on legal and Counting the money basically accounting, or Finance or something like that. 12 of the 22 listed Executives have backgrounds in law or lobbying or tax and accounting. That's more than half of the board who spends all of their time, effectively trying to get you in compliance or lobbying or talking about legal issues and the and and Counting count doing accounting. I don't know. Yeah. And to your point to your point, the current chair. Amy miles who we cited as being the former CEO at Regal, Entertainment Group became CEO but by first being the CFO she was in, right? So to your point in accounting, right? This is, this is like and this is what you see actually that we saw the same compact Boeing that we see here. The culture got replaced, it was a culture of engineering. I got replaced with Finance money accounting law. We're seeing it not just on the board of NSC, but in the management team first, where the jobs include, there's a head of tax, there's a controller, there's a Treasurer and a CFO, and an internal auditor. Yeah, I mean, how many people do you need to basically do Quicken right? Like, yeah, I mean, this very clearly suggests that they have two Gene pools basically that they're picking from, and they're, they're right you. They refuse to do any work Beyond those pools. In fact, when you're talking about Gene pools, it gets even worse because 10 of the 22 of the listed management channel on the website. I have 20 plus years experience at Norfolk, Southern side of them are lifers. They've never had a job outside in Norfolk. Southern meaning culture is of Norfolk, Southern not today, but For the last 20 to 30 years is embedded in them, right? Like that's all they know. So you're gonna ask people who all they know is Norfolk Southern and the culture that got them to this place to the East Palestine derailment to like poor performance overall lagging. Their railroad appears, you're going to ask them to be the ones to lead the pivot lifers there. And let's not forget, this is not all, not all about the East, Palestine derailment because you cited figures, that was it between 2014 and 2022. They're safety. There's safety was the worst the industry here. It doubled it. They're actually, this is not just just about that event in 2023 and the people who lead this company are as parochial and monoculture as it can get 50% of the executives went to Virginia colleges mostly UVA and like I mean we're talking about not that large estate but you Are a you are a massive Corporation. You're S&P, 500 Fortune, 500 company. You can hire anybody you want in this country and I know you were based in Virginia for a long time. That does not mean you have to get every one of your people from Virginia, half of the executives. Went to Virginia colleges 78% are white. 78% are male, 63% are white male. I mean, you don't have to choose the talent that's close to you. It's a, it's a reluctant to rely on any network, beyond the ones they feel comfortable in, right? And yeah, go ahead. No, I think that's ultimately what this is about. Is that it To to, to, to create a strategy, based on board refreshment is, is not an aggressive tactic against existing directors. It's a way of of opening up. Skill sets adding skill sets opening up new networks, right? This is not a, this should not be characterized as a negative thing. I mean, what anchor is is asking for suggesting to quote, Jeffrey. Sonnenfeld again is not, it's not a vicious attack, you know what I mean? It's not a personal attack, it is just a way of kind of loosening up an old boys network. That might not be benefiting shareholders at Norfolk. Southern horse or Beyond Cheryl just stakeholders of North Southern, right? But even when you're talking about adding skills and here's the evidence that the team that's in place both on the board and in management, maybe the wrong team. This is a group that has a history of sort of fudging the skills. Michael Lockhart, who is stepping down retiring, he's being replaced on the Safety Committee. He was the head of the Committee by Christopher Jones who joined the board in 2020. Now Lockhart did not have according to Norfolk Southern's own disclosures safety listed as an expertise of his until an Acme backed activists. Went for the CN went for a takeover of NSC in 2015. As soon as an activist came in all the sudden, Michael Lockhart had safety experience. Maybe took a class. Great. Sure, possible. But in in 2020, he was made me the head of the first Safety Committee and he stayed the head of the Safety Committee until now, accidents went up the whole time, right? So it's not exactly like his safety experience was helpful. Now, you have Christopher Jones taking over who in 2021 not listed as having safety experience in 2022. Not listed as having safety expertise in 2023, not listed as having sexy expertise, and 2024 he's named the head of the Safety Committee. And all of the sudden he goes from Christopher Jones to Dr. Jones. Yes, he has a PHD but now you're disclosing it in response to Ankara, he's given a doctor in his title and safety is mentioned, 15 times in his bio and he has safety experience. Look. Yeah and look, the only reason why we follow some of these weird trails and dive into these rabbit. Holes is because when we see a pattern of behavior Behavior, like, for instance, using son, feld's research but, but being a very unclear about the relationship or like, you know, people going from Mr. To doctor, or having safety skills, and not having safeties. It also led us to to dig into their Wikipedia page which we did. Notice that that suddenly there's a there's a very neat section about all these safety improvements going on at all, other improvements all added by by one Wikipedia user named, Joey Macintosh. Who we don't, we're not really clear who he is because he's not actively involved with other Wikipedia. A entries. But but there is some kind of a strange culture of disclosure going on at Norfolk, where it's kind of holding on to, like the last messages of creating defense against its old boys network, right? Like, they're not really, they're not kind of owning us that disclosure, they're not owning up to to some of its failures. And moving forward, they're staying in the past and my guess is what they don't want you to see is that on this board Norfolk Southern board members have added 5.9 billion in cap value over their respective 10 years relative to their influence on the board. While the average rail sector groups have added 19 billion. They are underperforming by three times, the average director, they have spent, they have okay, dividends and BuyBacks at seven times. The rate they've spent on safety, they the estimated 2022. Spend on safety was 1.2 billion. Meanwhile, 2.8 billion and Buybacks in 2018 to 1:29. 9.7 billion since 2018 in total BuyBacks, that might suggest why they have so many accountants and former CFOs on their board. Yeah, that's what they're counting right quarterly dividends themselves have increased since 2017 per share and they target actually 40% of earnings, paid out to investors directly. This is a group that does a really great job of not having you focus on Salient issues to ongoing things in favor of short-term things like BuyBacks and dividends. And it's not just that it's a group that's highly interconnected with one another over time, right? Like so this is we can see board Loops that go back over the history of this board. There are a few boards that have as many Loops back Boeing is one of the worst, you know, sort of a Templars of this, where you see these members sit on other boards with one another and it always comes back to them, which gets us to the Slate, right? Okay, and here's the question about this and chorus slate. Do they actually solve the problem? Of the that Norfolk Southern has because Ankara has put out a tremendous amount about new strategy and that these are the people to execute it. Now I don't know what strategy, what railroads strategy is the best strategy? Sure. It's not my job but I can look at the slate and ask some of the same questions that we ask of the Norfolk Southern board. What we see on the Slate. Is people who are in fact, one who've dropped out, who Jeffrey sonnenfeld wanted to imply dropped out for like suspicious reasons. Yeah, there's no there's no evidence to support that. Yes, perhaps, that's the reason why she left because it's because anchor represents a train wreck or something. He actually used that, and he used those terms right derail pun to use Great Train, Robbery puns. He's basically, you know, making fun of the the residents of East Palestine with his corny jokes. Well, that was standing. Don't direct that dropped out, his Nelda Connors, who's sitting on four boards, currently? Yeah, it's already too many. I think, the reason why you would drop out is pretty obvious if you're adding a 5th board, right? Like it becomes too much, that said, Betsy Atkins is on five boards, currently, right? Like, why are we putting up Betsy Atkins on a slate? She's on, she's a super border, she's a teenager history on boards. She's from a VC firm, so maybe she's just represents. Which is fine, you know, like I'm glad she's probably great at her job and that's why you want to choose her. But there are other people that you can choose. They chose Bill Clyburn Junior who's an ex railroad, regulator Senate council. He's a government won. He's DC based government walk. That's great. That's I think that I'm actually, he's one of my votes. For I support that that director samay Fami and xcsx advisor, and he was at CN SVP. So, he's railroad experience. Yeah. They have. They have, they have representatives from CSX Corporation from Canadian National Railway from Amtrak from rumor. Reel way. All kinds of Industry experience, Allison Landry's on the XPO board. She's my other four, but you also have they put up, John Kasich, who's the ex-governor of Ohio, ran for president and Gilbert lamphere and CSX board, and CN board and co-founder of Mid-South rail Corporation, right? That's pure railroad is out there, right? And you know what they solve really well in corals the, there's Is not enough rail experience on this board but what they don't solve is that, it's comprised of, there's a board comprised of interconnected directors, right? This is the replacement board actually. The new CEO would be from you UPS the CEO and barber. Yeah yep the CEO would be from CSX right. Amy Boyd, Chuck. But two of the Slate members of board members would also be have backgrounds from CSX. So we're replacing some level of interconnectedness at Norfolk Southern with CSX and CN interconnectedness, right? Like I'm not sure that, that's what we want necessarily. Well there, because in the time frame, that Norfolk Southern had an 112 111% increase in accidents, CSX had a 53% increase in accidents. Norfolk Southern had a 23% increase in employee injuries, and ESX had a 39% increase in employee injuries. Well, I'm not sure it replacing there. This is why I think the strategy from the beginning was it is the strategy that this is why we're here, right? Is that instead of electing the entire slate and Cora, you, you focus on your choices which are Bill Clybourne Sammy, femi, and Alison Landry. And you remove the CEO Alan Shaw from the board and I think you have a pretty fair compromise, right there. That's, that's, that's the takeaway to me. The hybrid approach is the best approach. It is remove the vestiges of the past now, and this is a multi-year process, right? Once you wait a year and see what you've got, but because you eventually next year, what should have been on? This slate is not Precision railroad. It needs to be data, it needs to be AI. It needs to be people who think outside of some of that box too. You want the railroad experience the engineers. But you want to mix it with other experience types, particularly modern experience types. Not just rooted in all railroads from the last 50 years. We're talking about in like we're trying to innovate on a something that was like the biggest in 1880, right? Like it's time to like add new fresh blood to these boards. So my final recommendations for the board is the hybrid approach. Know, Alan Shaw, know, Amy miles, no. Marcella Donna, Dio, yes, to Bill Clyburn, Junior from Angora. Yes to Sammy Fami at and Cora and yes to Allison, Andrea. And again, what this does before we wrap up I want to just remind the audience that what this does is it is it breaks up the consolidation of power that is now in the hands of Alan, Shaw and Amy Myles right by by removing some directors from the board. You're not, yes, you're appeasing the market. But what you're really doing, is not moving forward, just Not creating avenues for new strategy Innovation, you really just Consulting power with a man who's been there since the 90s. So it's it's not the intended effect that shareholders think it is. So I think it's a good strategy. I think we've said enough about Norfolk. Southern if you, if you want us to weigh in about their Charlotte, proposals are saying to us. We'll do that for you. But for now, I think that's plenty. That's, I'm exhausted. I'm gonna go take a nap. Now, that's the proxy countdown for the week of April, 22nd 2024 join us next week. When we jump back into the alternative democracy pool. Forever on the lookout for shareholder sharks floating Band-Aids and Wayward directors.