New York
CNN
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Norfolk Southern CEO Alan Shaw acquired a 37% improve in compensation final yr, even after the corporate’s railroad was concerned in a financially and ecologically disastrous derailment in East Palestine, Ohio.
Shaw acquired $13.4 million in whole compensation in 2023, up from $9.8 million in 2022. His base wage rose $200,000 to $1.1 million, and his inventory and choice awards rose $2.2 million to $10 million.
Final yr was Shaw’s first full yr as CEO after beginning on Could 1, 2022, so a part of the rise in compensation could be attributed to having labored extra months on the job final yr than the yr earlier. However he was president of the corporate within the first 4 months of 2022, and his promotion to that position in late 2021 had already resulted in his compensation greater than doubling in 2022 in comparison with 2021.
The accident on February 3, 2023, didn’t end in any fatalities, however did trigger an enormous hearth fueled by poisonous chemical compounds and the evacuation of a lot of the small Ohio city. And it cost the railroad $1.1 billion, in response to its most up-to-date estimate.
The corporate’s general web revenue fell 44% final yr to $1.8 billion. Shares of Norfolk Southern (NSC) fell 22% within the two months following the accident, however the inventory has since recovered most of its worth, and its present share value is barely above its pre-derailment stage.
Shaw’s adjustments in railroad procedures have gained the help of the Brotherhood of Locomotive Engineers, the union that represents the corporate’s engineers. However the issues at Norfolk Southern have sparked a proxy battle, as an investor group led by Ohio-based Ancora Holdings is searching for to elect another slate of candidates to the corporate’s board of administrators, with the aim of changing Shaw.
“It’s alarming that the board rewarded Mr. Shaw with an enormous increase and whole compensation of $13.4 million throughout the identical yr he presided over industry-worst working outcomes, sustained underperformance and a tone-deaf response to the derailment in East Palestine,” the group advised CNN in an announcement. “This failure of company governance … reinforces the necessity for sweeping adjustments to Norfolk Southern’s effectively paid board.”
The shareholder group stated it desires to exchange Shaw with Jim Barber Jr., a former chief working officer at UPS.
In an announcement on its web site, Norfolk Southern stated within the coming weeks it “may also present particulars relating to how Ancora’s nominees and plan could not solely hinder the profitable execution of a technique that’s yielding outcomes, but additionally threaten Norfolk Southern’s progress on security, its continued dedication to the neighborhood of East Palestine, and its improved relationships with regulators and different stakeholders.”
The proxy submitting from Norfolk Southern stated its board has “unanimous help for the corporate’s technique that balances protected and dependable service, steady productiveness enchancment and sensible progress beneath the management of CEO Alan Shaw.”
Norfolk Southern additionally introduced the names two of its 13 board member nominees — Richard H. Anderson, a former CEO of Amtrak and Delta Air Traces, and Mary Kathryn “Heidi” Heitkamp, the previous US senator of North Dakota — to fill the seats of two retiring board members and two who usually are not working for re-election.
The opposition investor group stated the corporate’s new slate of board members gained’t cease it from pushing its slate of eight candidates.
“Mr. Shaw and his boardroom allies haven’t any credible plan and no viable document to run on,” stated the group.