Norfolk Southern Corp. fired Chief Executive Officer Alan Shaw following an investigation into claims he was involved in an inappropriate workplace relationship, a sudden downfall just over two years after he took the helm.
Shaw was terminated for cause, effective immediately, after the railroad found he violated company policies by engaging in a consensual relationship with Norfolk’s chief legal officer, according to a statement Wednesday. Norfolk said it fired Nabanita Nag from her role as the top legal officer.
Chief Financial Officer Mark George was appointed CEO and will join the board, according to the statement. Jason Zampi will serve as acting CFO.
The stunning changes upend the leadership of one of the country’s most prominent railroads. Norfolk, which has battled an activist campaign and negative attention from a toxic train derailment over the past two years, has been looking to revamp its operations and improve service under Shaw.
Norfolk’s shares were unchanged in after-hours trading following the announcement.
Shaw’s ouster comes just days after Norfolk said its board had hired a law firm to conduct an independent investigation into allegations of conduct by the CEO that was “inconsistent with the company’s code of ethics and company policy.” The investigation is ongoing.
Norfolk said Wednesday that the board’s decision to terminate Shaw was unanimous.
Strategic Shift
Shaw, who started in Norfolk’s finance department in 1994, became CEO in May 2022 with a plan to move the company away from the precision scheduled railroading strategy that was pioneered by late executive Hunter Harrison and has been widely adopted across the company.
His plans for change were upended by a train derailment last year that spilled toxic chemicals in East Palestine, Ohio, which unleashed a torrent of criticism from lawmakers along with proposals to introduce more safety regulations. The company agreed to a settlement with residents in May.
Shaw had previously prevailed in a campaign by activist shareholder Ancora Holdings Group to replace him and other leaders of the railroad. The investor faulted Norfolk’s response to the derailment and criticized the company’s performance. While Shaw won a shareholder vote in May to keep his job, investors opted to replace three members of the company’s 13-person board with Ancora-backed candidates.
(Updates with additional details beginning in second paragraph.)
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