Norfolk Southern CEO Alan Shaw has been terminated after the company launched an investigation into potential misconduct, the company announced Wednesday evening.
The Atlanta-based railroad appointed Mark George, the company’s current chief financial officer, to replace him. George is also joining the company’s board.
Shaw was terminated for cause, effective immediately, according to the company. He was terminated after preliminary findings from an “ongoing investigation” determined he violated company policies by engaging in a consensual relationship with the company’s chief legal officer, according to Norfolk Southern. The chief legal officer, Nabanita C. Nag, has also been terminated effective immediately in connection with preliminary findings of the investigation, according to the company.
“The Board has full confidence in Mark and his ability to continue delivering on our commitments to shareholders and other stakeholders. Mark has played an integral role in our recent progress and brings decades of financial experience and strong operational expertise,” said Norfolk Southern Chairman Claude Mongeau in a written statement. “He embodies our corporate values and is a champion of our safety culture. In close partnership with our accomplished COO, John Orr, they will continue to improve NS’ operating performance and close the margin gap with peers.”
George said in a written statement that he looks forward to working with Orr and the rest of the company “as we further our progress on optimizing operations and serving our customers, while creating a safe and satisfying workplace and delivering enhanced value for our employees, customers, shareholders, and communities.”
Jason Zampi was named as acting chief financial officer.
Norfolk Southern said Shaw’s departure is unrelated to the company’s performance, financial reporting and operational results, and reaffirmed its financial guidance for this year.
Shaw and Nag did not immediately respond to requests for comment from The Atlanta Journal-Constitution.
Norfolk Southern said Sunday that its board of directors had launched an investigation of alleged misconduct by Shaw.
The company said the board’s audit committee hired a law firm to do an independent probe of the allegations of “potential conduct” by Shaw “that is inconsistent with the company’s Code of Ethics and company policy.” It said the company’s code of conduct allows employees to anonymously report concerns.
CNBC, citing unnamed individuals with knowledge of the investigation, first reported that the inquiry related to allegations of an inappropriate relationship at work.
Aside from this investigation, Shaw and the company’s management have been under severe scrutiny since last year, when a Norfolk Southern train carrying hazardous materials derailed in February 2023 in East Palestine, Ohio. Earlier this year, an activist investor group carried out a campaign to gain control of the railroad by replacing Shaw and a majority of the company’s board members.
The activist investment firm, Ancora Holdings Group, got three new board members elected to the railroad’s board in May — but failed to gain majority control of the board and effect a plan to replace Shaw.
Shaw has been CEO for less than three years. He took the helm of Norfolk Southern in May 2022, replacing Jim Squires. Less than a year later the Ohio derailment plunged the railroad into crisis.
Shaw became the face of a company associated with disaster, facing harsh criticism from regulators, national and state public officials, as well as residents affected by the derailment near the border between Ohio and Pennsylvania.
In the wake of the derailment, Shaw appeared in a contentious CNN town hall and congressional hearings. He was also regularly in East Palestine, company officials said, meeting with town leaders and other officials.
The company has recorded more than $1.6 billion in charges, including a $600 million settlement to resolve a consolidated class action lawsuit filed against the railroad after the fiery crash of the train, which was carrying hazardous materials.
The company also in May agreed to a more than $310 million settlement of federal investigations into the derailment.
Norfolk Southern has about 20,000 employees, including about 3,300 at its headquarters in Midtown Atlanta. Shaw joined the company in 1994 as a cost systems analyst and was promoted through the ranks, being named president in 2021 and assuming the top job the next year.
Shaw’s compensation totaled $13.4 million last year, his first full year as chief executive, according to a filing with the U.S. Securities & Exchange Commission. His total compensation in 2023 included a salary of $1.1 million. The biggest increases in his compensation came in the value recorded for stock awards and retirement plans.
He moved his family to Atlanta after Norfolk Southern began moving its headquarters from Norfolk, Virginia in 2019.
In March, Norfolk Southern replaced its chief operating officer amid the Ancora pressure campaign, bringing on Orr, who was chief transformation officer at Canadian Pacific Kansas City.
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