Norfolk Southern’s board is currently investigating allegations that CEO Alan Shaw engaged in an inappropriate workplace relationship. The probe is in its early stages and may not necessarily uncover any misconduct. Shaw, along with several directors and company spokespeople, did not respond to requests for comment on the matter. The board has undergone significant changes in recent months, with an activist investor attempting to oust Shaw from his position earlier in the year.
Despite efforts by activist investor Ancora to remove Shaw from his role, he remains the CEO of Norfolk Southern. However, three of Ancora’s candidates were elected to the board, and a significant portion of shareholders voted against Shaw’s re-election. The company is working with outside legal advisors on the investigation into Shaw’s alleged misconduct. If Shaw were to step down, possible internal candidates to replace him on an interim basis include COO John Orr and CFO Mark George, both with extensive experience in the railroad industry.
John Orr, who joined Norfolk Southern during the proxy fight, has been working to improve the company’s operations in the field. He previously held executive positions at Canadian Pacific Kansas City and has faced allegations of misconduct raised by Ancora during its campaign. Norfolk Southern defended Orr’s track record, accusing the activist firm of trying to distract from its own executive candidates’ qualifications. Mark George, on the other hand, has been the CFO of Norfolk Southern for approximately five years, previously working at HVAC maker Carrier. Another potential candidate for the CEO role is board member Sameh Fahmy, who oversaw Kansas City Southern’s precision-scheduled railroading program.
The investigation into Shaw’s alleged inappropriate workplace relationship comes amidst ongoing challenges faced by Norfolk Southern, including poor stock performance and criticism of its operating strategy. The company has not provided any further details on the probe, and it is unclear how the allegations may impact Shaw’s position as CEO. Despite the recent shareholder discontent and board changes, Norfolk Southern continues to operate in the railroad industry. The outcome of the investigation and any potential leadership changes at the company remain to be seen as the situation develops.
