Atlanta-based Norfolk Southern said its board of directors is investigating allegations about the conduct of its CEO Alan Shaw.
The company said late Sunday the board’s audit committee has hired a law firm to do an independent investigation 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.
The nature of allegations against Shaw was not disclosed in the company’s statement.
On Sunday, CNBC, citing three unnamed individuals familiar with the matter, reported the investigation related to allegations of an inappropriate relationship at work. Shaw did not immediately return messages seeking comment from The Atlanta Journal-Constitution about the CNBC report. Company spokespeople declined to comment about the CNBC report.
The board committee is “committed to a complete and reliable examination of all pertinent facts,” according to the company, which added that it and the board could not comment further until the investigation is complete. No timeline was given.
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.
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 CEO in 2022.
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.
In March, Norfolk Southern replaced its chief operating officer amid the Ancora pressure campaign, bringing on John Orr, who was chief transformation officer at Canadian Pacific Kansas City.
Norfolk Southern’s board is chaired by Claude Mongeau, former CEO of Canadian National Railway Co., who has served on Norfolk Southern’s board since 2019.
The members of the board’s audit committee are chair Marcela Donadio, Christopher T. Jones, Francesca DeBiase and Sameh Fahmy. Fahmy, a former Kansas City Southern railroad executive, was one of Ancora’s nominees elected to the board earlier this year.
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