Norfolk South Corp. fired CEO Alan Shaw following an investigation into allegations that he was involved in an inappropriate workplace relationship – a sudden ouster just over two years after he took the helm.
Shaw was terminated with cause, effective immediately, after the railroad determined he violated company policy by engaging in a consensual relationship with Norfolk’s chief legal counsel, it said in a statement Wednesday. Norfolk said Nabanita Nag was terminated from her position as chief legal counsel.
Chief Financial Officer Mark George has been named CEO and will join the board, the statement said. Jason Zampi will serve as acting CFO.
The surprising changes are shaking up the leadership of one of the country’s most prominent railroads. Norfolk, which has struggled over the past two years with an activist campaign and negative attention stemming from a toxic train derailment, is now trying to transform its operations and improve service under Shaw.
Norfolk shares remained unchanged in after-hours trading following the announcement.
Shaw’s firing came just days after Norfolk said its board had hired a law firm to conduct an independent investigation into allegations against the CEO that his conduct was “inconsistent with the company’s code of conduct and corporate policy.” The investigation is ongoing.
Norfolk said Wednesday that the board’s decision to fire Shaw was unanimous.
Strategic change
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 rail scheduling strategy developed by the late CEO Hunter Harrison and widely adopted across the company.
His plans for change were derailed by a train derailment last year that released toxic chemicals in East Palestine, Ohio. That sparked a barrage of criticism from lawmakers and led to proposals to impose stricter safety regulations. The company reached a settlement with local residents in May.
Shaw had previously prevailed in a campaign by activist shareholder Ancora Holdings Group to replace him and other railroad executives. 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-member board with Ancora-backed candidates.
(Updated with additional details starting in the second paragraph.)