News & Reviews News Wire As investor group calls for ouster of NS officials, railroad seeks to correct ‘false claims’

As investor group calls for ouster of NS officials, railroad seeks to correct ‘false claims’

By Bill Stephens | March 4, 2024

Norfolk Southern says the railroad’s executives did not receive bonuses in 2023, and that CEO Alan Shaw’s compensation was 33% below its realizable level

Email Newsletter

Get the newest photos, videos, stories, and more from brands. Sign-up for email today!

Locomotives on riverbank after derailment
No injuries reported, but diesel fuel and plastic pellets were spilled into the Lehigh River, following this collision and derailment Saturday, March 2, near Allentown, Pa. Nancy Run Fire Company

TORONTO — EdgePoint Investment Group, which has a $960 million stake in Norfolk Southern, today praised the proxy battle that activist partner Ancora Holdings is waging against the railroad.

“EdgePoint supports the changes proposed by Ancora to NSC’s board of directors and management team,” EdgePoint said in a statement. Ancora has proposed a majority slate of eight directors and wants to name former UPS executive Jim Barber as NS chief executive and former CSX operations boss Jamie Boychuk as chief operating officer.

“We believe the status quo at NSC will lead to continued underperformance of the railroad. We also believe that Board refreshment and Jim Barber’s and Jamie Boychuk’s leadership are essential for enhancing safety and for ensuring outstanding long-term achievements for the benefit of all NSC’s shareholders and other stakeholders,” EdgePoint said.

Norfolk Southern, meanwhile, sought to set the record straight today regarding the railroad’s safety record and CEO Alan Shaw’s compensation.

Ancora released a statement a few hours after a Saturday morning NS derailment in Pennsylvania calling for the “immediate termination” of Shaw. The Cleveland-based firm said it stands ready “to engage with the company about an orderly reconstitution of the Board and a transition to capable management with a track record of actually delivering on safety commitments,” and that images from the derailment “underscore the urgent need to replace the company’s failed executive leadership and provide the railroad the fresh start it so desperately needs.”

NS said it was “unfortunate that a serious situation is being used to mislead stakeholders and to advance a proxy fight narrative.”

NS said it quickly responded to the derailment in Lower Saucon Township, Pa., and noted that no one was injured and no hazardous materials were released from freight cars. “We take this incident seriously and work hard to avoid all accidents,” NS said. “The National Transportation Safety Board is investigating this incident, and we will work closely with them to understand how it happened and prevent others like it.”

NS also said its safety record improved last year, citing its industry leading 42% reduction in mainline derailments.

“We are committed to building on our safety track record and setting the gold standard for rail safety. We know there is no single solution when it comes to safety. Last year, we initiated a six-point safety plan and made necessary investments to accelerate enhancements to our safety culture and operational transformation,” NS noted. “This included installing cutting-edge digital train inspection portals, implementing enhanced employee training, and being the first Class I railroad to join the Federal Railroad Administration’s Confidential Close Call reporting system. We are incorporating feedback from our labor leaders and partnering on new safety initiatives. We also hired Atkins Nuclear Secured as an independent safety consultant. With significant project management and Nuclear Navy experience, they have conducted a comprehensive safety assessment, and we are implementing changes based on their recommendations.”

NS also said that Ancora was distorting the facts on 2023 management compensation. “Contrary to Ancora’s claims, the board did not ‘raise CEO pay 37%,’” NS said today.

Compared to his target compensation, Shaw saw a 33% reduction in his “realizable compensation at year end,” NS said. The difference in his compensation in 2023 reflects the fact that it was his first full year as CEO.

The NS board eliminated the 2023 annual incentive awards to C-suite executives.

2 thoughts on “As investor group calls for ouster of NS officials, railroad seeks to correct ‘false claims’

  1. It was widely reported Shaw’s 2023 compensation was $13.4M. That is as immoral as grotesque. The press release obfuscates this simple fact. How can Shaw and Norfolk Southern look in the mirror?

    In this warped, degenerate late stage capitalism, two hedge funds that hold only $2B in Norfolk Southern shares are essentially calling the shots for a corporation with $56B market capitalization. Who knows what other instruments are out there to win the battle. Norfolk Southern hasn’t abandoned PSR methods, but the ghouls are certainly able to do moar PSR, layoffs, closures and asset stripping. Transportation policy is set by Wall Street.

You must login to submit a comment