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Alan Shaw, the President and CEO of Norfolk Southern Corporation, was terminated by the railroad’s board on Wednesday. The dismissal was due to Shaw's involvement in a "consensual relationship" with the company’s chief legal officer, who was also dismissed, the company announced.
The statement from Norfolk Southern noted that Shaw was fired "for cause," a decision that could impact his ability to receive a typical severance package for departing CEOs.
The company had initially disclosed Shaw's involvement in an investigation on Sunday.
Shaw, who had been at the helm of one of the nation's major freight railroads for just over two years, faced a series of challenges during his tenure. These included contentious labor negotiations, a significant derailment in East Palestine, Ohio, which released toxic chemicals and led to ongoing health concerns, and a proxy battle with activist shareholders calling for his removal.
Despite surviving the shareholder vote earlier this year, Shaw could not withstand the fallout from the investigation into his personal conduct.
Norfolk Southern also announced the immediate termination of Nabanita Nag from her roles as executive vice president of corporate affairs, chief legal officer, and corporate secretary, in connection with the preliminary findings of the ongoing investigation. CFO Mark George has been appointed as the new CEO.
“The Board has full confidence in Mark and his ability to continue delivering on our commitments to shareholders and other stakeholders,” said Claude Mongeau, chairman of Norfolk Southern’s board.
The company's statement did not acknowledge Shaw’s 30 years with the company, nor did it include any comments from Shaw, who was unavailable for immediate comment. Shaw had joined Norfolk Southern in 1994 as a cost systems analyst and rose through the ranks over the years.
Shaw's tenure saw both support and criticism. During the proxy fight earlier this year, some unions and past critics acknowledged improvements in railroad safety following the February 2023 derailment in East Palestine. Federal Railroad Administration Administrator Amit Bose praised the safety measures implemented under Shaw's leadership, noting significant reductions in mainline derailments.
However, the actions of Norfolk Southern following the derailment faced severe criticism from Jennifer Homendy, chair of the National Transportation Safety Board (NTSB). The NTSB criticized the railroad’s handling of the aftermath, particularly its failure to provide adequate information to first responders and the decision to conduct a controlled burn of vinyl chloride, a toxic chemical, despite concerns over potential explosions.
The NTSB's investigation found that the derailment was caused by a failure of an axle, which ignited a fire and led to the derailment. The decision to proceed with the controlled burn, made three days after the derailment, faced criticism for the lack of timely and accurate information provided to public officials.
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