Reports: Shaw Departing NS Due to Misconduct Probe
Written by William C. Vantuono, Editor-In-Chief, Railway Age
Is Norfolk Southern President and CEO Alan Shaw resigning?
Norfolk Southern photo
ATLANTA –– The Wall Street Journal has reported that Norfolk Southern President and CEO Alan Shaw is expected to step down from his role amid an investigation into allegations of potential misconduct—“an inappropriate workplace relationship.” Various news reports, beginning with CNBC, said that the NS board of directors had hired outside legal counsel to investigate the matter; the railroad has confirmed that.
“Norfolk Southern Corporation acknowledges that its Board of Directors has opened an investigation into allegations of potential conduct by CEO Alan Shaw that is inconsistent with the company’s Code of Ethics and company policy,” NS said in a statement. “Norfolk Southern holds all its team members to the highest standards. In line with the company’s Code of Conduct and company policy, allegations of misconduct are thoroughly investigated. The code also includes resources for employees to anonymously report concerns, including through the Ethics & Compliance Hotline. The Board of Directors’ Audit Committee has retained a law firm to conduct an independent investigation of the allegations and is committed to a complete and reliable examination of all pertinent facts. To ensure a fair investigation, the company and the Board cannot comment further until the investigation is complete.”
“Shaw is expected to depart the company as soon as this week amid a board investigation into an alleged relationship he had with an employee at the railroad, according to people familiar with the matter,” The Wall Street Journal reported. “Shaw didn’t respond to requests for comment.”
Shaw, a 29-year employee of the Class I and its CEO since 2022, and Norfolk Southern have gone through a tumultuous period in the past 18 months, beginning with the East Palestine derailment in February 2023 and lasting through activist investor Ancora Holdings’ attempted hostile takeover earlier this year. Ancora sought to oust Shaw over his handling of the East Palestine derailment, Norfolk Southern’s lagging stock performance and what Ancora described as a flawed operating strategy. Ancora did not manage to fire Shaw, but shareholders elected three of its candidates—Gil Lamphere, Sameh Fahmy and William Clyburn Jr.—to the board, and roughly 36% of shareholders voted against Shaw’s reelection.
According to news reports, the two likeliest internal candidates to replace Shaw on an interim basis would be Executive Vice President and Chief Operating Officer John Orr or EVP and CFO Mark George. Orr joined NS in the midst of the proxy battle following a long and distinguished career at CN, Kansas City Southern and CPKC. George has been NS CFO for about five years, joining the railroad from Carrier. NS could also tap Fahmy, whom Orr worked for and was most recently in charge of the former Kansas City Southern’s PSR program.
NS shares closed at $256.81, up 2.72%, on Monday, Sept. 9.
