Norfolk Southern CEO received major pay boost despite East Palestine derailment
Norfolk Southern CEO Alan Shaw received significant pay raise last year despite the disastrous derailment in East Palestine, Ohio, and calls for him to be fired.
Norfolk Southern is facing criticism after reporting CEO Alan Shaw received a significant pay boost last year, despite the railroad company's disastrous derailment in East Palestine, Ohio, and calls for Shaw to be fired over his handling of the incident.
Norfolk Southern's latest proxy statement shows Shaw's total target pay was $13.4 million in 2023, a 37% increase from the $9.7 million he received in 2022. The CEO's base salary went from $900,000 to $1.1 million, while his stock awards and options grew from $7.7 million to $10 million.
However, 2023 was Shaw's first full year as chief executive, after he was promoted over the course of 2022 from chief marketing officer to president to CEO.
The revelation of Shaw's pay package comes as a group of Norfolk Southern investors led by Ancora Holdings aims to replace the railroad operator's top management, including him.
BIDEN ADMIN INSISTS PRESIDENT HAS ‘LASER FOCUS’ ON EAST PALESTINE DESPITE NOTE VISITING FOR A YEAR
"It’s alarming that the Board rewarded Mr. Shaw with a massive raise and total compensation of $13.4 million during the same year he presided over industry-worst operating results, sustained underperformance and a tone-deaf response to the derailment in East Palestine," the group told FOX Business in a statement.
"This failure of corporate governance, which is buried within a more than 100-page regulatory filing, reinforces the need for sweeping changes to Norfolk Southern’s well paid Board," the group added. "We hope labor leaders, regulators and others take the opportunity to question the pay-for-failure mentality in the company’s boardroom."
EAST PALESTINE, OHIO RESIDENTS ON THE IMPACT OF THE TRAIN DERAILMENT ONE YEAR LATER
The derailment of a Norfolk Southern train at the Ohio-Pennsylvania border on Feb. 3, 2023, resulted in millions of gallons of toxic chemicals being spilled into the environment.
The disaster led to many residents on both sides of the border abandoning their homes and suffering from various ailments. The Atlanta-based railroad has been making payments to residents forced to relocate but announced in December that the financial aid would stop on Feb. 9.
Shaw visited East Palestine roughly two weeks after the spill, and has repeatedly said the company would make things right with residents, including in his testimony to Congress addressing the disaster last year.
He also rolled out additional operational safety measures for the railroad company following the derailment.
So far, Norfolk Southern has committed $104 million to the East Palestine community, including $21 million in direct payments to residents and $50 million in investments in the area over the next decade.
The company's proxy statement said it took a $1.1 billion hit last year due to expenses stemming from the incident, but still made $2.9 billion.
Norfolk shares fell nearly 5% in 2023 amid operating challenges and the fallout of the costly derailment in East Palestine.
The stock is up 7.7% this year.
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When reached for comment, Norfolk Southern referred FOX Business to a press release accompanying its proxy statement on Monday. The railroad said it unanimously rejected Ancora's proposed slate of new board members and "confirmed its unanimous support for the company's strategy that balances safe and reliable service, continuous productivity improvement and smart growth under the leadership of CEO Alan H. Shaw."
FOX News' Louis Casiano and Reuters contributed to this report.