Two more entities this week joined the brewing proxy battle at Forward Air Corp. led by activist investor Ancora Holdings Group LLC, which is calling for the removal of three board directors in a move to turn around the LTL carrier.
The second proxy advisory firm — Glass, Lewis & Co. — and Forward Air founder Scott Niswonger, a former company president and CEO for more than a decade after he first started the company, both agree that the carrier needs a board leadership overhaul.
“This ought to be a Harvard Business School case study on how poorly you can execute a merger for all the wrong reasons,” Niswonger told Transportation Today during an interview on Tuesday. “I mean, there’s nothing about it that makes any sense.”
Niswonger’s stance mirrors that of Ancora, Glass Lewis, and prominent independent proxy advisory firm Institutional Shareholder Services Inc. (ISS), which all recommend that shareholders of Forward Air — which provides ground transportation and related logistics services across North America — vote not to re-elect Board Chairman George S. Mayes, Jr., and board members Javier Polit and Laurie Tucker.
According to Reuters, Glass Lewis said in its recommendation to shareholders Monday that “the specific elements underpinning Ancora’s current campaign … establish persuasive cause for investors to take direct action at this time.”
Specifically, Ancora said in a recently released 27-page detailed presentation that Mayes, Polit, and Tucker should be removed to “prevent further value destruction” to Forward Air.
“At a minimum, Ancora believes it is critical to send an indisputable message of our dissatisfaction to Forward Air’s Board of Directors,” the firm stated, accusing the trio of “inaction, failed oversight, and extremely problematic decisions,” most notably their support for the 2023 acquisition of Omni Logistics LLC.
That deal, which Ancora labeled “disastrous,” saddled Forward Air with significant debt, operational disruptions, integration challenges, and strained customer relationships. And since the transaction, Forward Air has reported negative earnings per share, underdelivered on EBITDA projections, and increased its net leverage to 5.5 times, Ancora says.
Niswonger, a Forward Air shareholder who resigned from the board prior to its vote on the Omni Logistics deal, also called the merger “a disastrous failure” that should have been recognized from the first moment the bankers started to pitch it, largely because Forward Air was thriving on its own and didn’t need to take on billions in debt to buy Omni, a competitor of Forward Air’s customers.
“The only salvation will be to get board members in there that say ‘we have to spin off Omni if we want Forward Air to survive,’” said Niswonger. “The only solution to this problem if you want to maintain Forward Air is to sell or spin off Omni Logistics into its own public company and use the proceeds to reduce the debt.
“Then go beg your customers for forgiveness and say ‘we are no longer going to compete with you,’” he added. “‘We are going back to a company of neutrality where if you give us your freight, we will guard and protect it against any competitor.’”
Forward Air’s acquisition of Omni Logistics, completed in January 2024, involved a combination of cash and equity, valuing Omni at approximately $3.2 billion. The deal faced legal challenges before finally closing under an amended agreement that resulted in leadership changes, a significant loss for Forward Air in the fourth quarter of 2023, including severance expenses and operational costs, and layoffs.
“In light of the urgency for a well-run strategic review process, coupled with the governance failures related to the value-destructive Omni acquisition, there is a case for change at the board level,” ISS said in its May 30 Proxy Research Report. “Shareholders are recommended to withhold votes from Mayes, Polit, and Tucker, and vote for the remaining company nominees.”
Niswonger noted that a lot of funds listen to what Glass Lewis and ISS have to say and their recommendations carry a tremendous amount of weight. “They will vote the way ISS recommends, so that’s huge,” he said.
Ancora details released
Ancora first invested in Forward Air in mid-2020 and said it worked constructively with leadership to meaningfully improve the company’s operational and financial performance from 2020 to 2022 “following years of acquisitions, margin degradation, and lagging total shareholder returns.”
Under Forward Air’s director resignation policy, board members receiving less than 50.1 percent shareholder support must tender their resignations — giving investors a mechanism to hold directors accountable.
Ancora says it is leveraging this provision to try to remove Mayes, Polit, and Tucker at the June 11 meeting.
In its presentation to shareholders, Ancora says Forward Air has significantly underperformed its industry peers and the broader market under the current board’s leadership.
Specifically, the three directors “have presided over enormous value destruction, with negative total returns and significant underperformance versus the S&P 500 Index, Russell 2000 Index, and S&P 500 Air Freight & Logistics Index during all relevant periods,” Ancora explained in a May 20 statement.
“Based on their shared history of poor decisions on transactions, we believe the targeted directors cannot be trusted to oversee the company’s strategic review and make sound decisions around fair value and the best risk-adjusted outcome,” the statement says.
In its presentation, Ancora also highlights ongoing concerns about Forward Air’s strategic direction, including what it deems a delayed and mishandled sale process and the board’s controversial approach to reincorporating from Tennessee to Delaware.
While Ancora supports the Delaware reincorporation proposal — viewing it as a necessary step to enable a potential sale — the firm criticized the board for maintaining shareholder-unfriendly provisions, such as restrictions on special meetings and written consent actions.
“We believe Forward Air has limited opportunity as a standalone public company given its high level of debt,” Ancora says, noting that it sees the company as a prime acquisition target and estimates that a sale could command a significant premium over current share prices.
The activist investor concluded that new leadership is needed to oversee Forward Air’s strategic review and maximize value for shareholders.
“At this critical juncture, we believe shareholders will be better off if they remove the targeted directors, whose shareholder-unfriendly history demonstrates that they cannot be trusted to make decisions in investors’ best interest — particularly decisions around fair value and the best risk-adjusted outcome,” said Ancora.
Niswonger is one of those shareholders in agreement.
The big money managers, such as BlackRock and Vanguard, he says, should take control of Forward Air starting with the June 11 board vote.
“Then they need to bring in a CEO … and a small team of people to get Forward Air straightened out. I tried to recommend that several times but it fell on deaf ears and that was early on,” said Niswonger. “I would say that … if you haven’t done that and started down that path in the next two quarters, Forward Air as we once knew it is going to be gone.”
While Forward Air has not yet issued a public response to Ancora’s presentation, in its 2025 SEC proxy statement, CEO Shawn Stewart wrote a May 13 letter to fellow owners saying that the board remains committed to maximizing value for shareholders.
“To that end, in January 2025, our Board of Directors announced that it initiated a comprehensive review of strategic alternatives,” Stewart wrote. “This process is underway and the Board is considering a range of options, including a potential sale, merger or other strategic or financial transaction relative to the long-term value potential of the company on a standalone basis.
“As we navigate through the uncertain broader macroeconomic backdrop,” wrote Stewart, “I am confident that we have a powerful platform to drive sustainable growth.”