Norfolk Southern CEO fired for ‘consensual relationship' with railroad's chief legal officer
The CEO’s two-year tenure was marked by challenges, including:
- Contentious labor negotiations
- A major derailment in East Palestine, Ohio
- A proxy fight with an activist shareholder group
The derailment in Ohio released toxic materials, causing health concerns and ongoing symptoms for some residents.
The company has appointed the CFO as the new CEO, with the board expressing full confidence in his ability to deliver on commitments to stakeholders.
The former CEO had been with the company for 30 years, starting as a cost systems analyst and progressing to higher positions of responsibility.
During the recent proxy battle, the CEO received mixed support from various unions. Some praised his efforts to improve railroad safety following the East Palestine derailment. The Federal Railroad Administration acknowledged progress in safety practices under his leadership.
Shareholders ultimately supported the CEO in the proxy vote, re-electing him to the board with 64% of the votes cast. However, three candidates proposed by an activist investor group also won election to the board.
The company’s actions related to the East Palestine derailment faced criticism from the National Transportation Safety Board (NTSB). The NTSB chair described Norfolk Southern’s post-derailment actions as putting first responders and neighbors at unnecessary risk, and called their behavior during the investigation “unprecedented and reprehensible.”
The NTSB investigation found that the derailment was caused by an axle failure on one car, which led to a fire and subsequent derailment. The agency criticized the company’s initial lack of information provided to first responders about safety hazards and the decision to conduct a controlled burn of toxic chemicals three days after the incident.