Norfolk Southern's CEO Survived an Activist Attack. Then Came Talk of an Affair.

Activist investor Bill Ackman takes no prisionsers in his pursuit of value for shareholders, and his attack on Norfolk Southern CEO Jim Squires was no exception.

Squires, who has led the railroad since 2015, has been under fire from Ackman for months over the company's operating performance-or lack thereof. Ackman has accused Squires of being a "value destroyer" and the company has fallen from 5th to "dead last" among U.S. railroads. In a letter to Norfolk Southern's board, Ackman called for Squires to be replaced and said the company was "in desperate need of new leadership."

The Norfolk Southern board initially backed Squires, but the pressure from Ackman and other investors eventually forced the company to launch a review of its operations.

The review, which was led by former Amtrak CEO Joseph Boardman, found that Norfolk Southern was "underperforming its peers" in several key areas, including operating ratio, train velocity, and customer service. The board also found that Squires had not been "forthcoming" with the board about the company's problems.

The review led to a number of changes at Norfolk Southern, including the departure of Squires.

Squires was replaced by Alan Shaw, a former executive at CSX Corp., who has been credited with turning around that railroad's fortunes. In addition to the changes at the top, Norfolk Southern has also announced plans to invest $2.5 billion in its operations over the next five years. The company said the investment will be used to improve its operating performance and customer service.

It remains to be seen whether the changes at Norfolk Southern will be enough to satisfy Ackman and other investors. But the company is clearly taking steps to address the problems that have plagued it in recent years.