By Svea Herbst-Bayliss
NEW YORK (Reuters) – Norfolk Southern on Wednesday fired its CEO, Alan Shaw, and promoted its CFO to the role of president of the railroad, following an internal investigation into allegations that Shaw violated the company’s ethics rules.
The company has named Mark George as president and CEO, ending days of heated speculation about Shaw’s future. The company admitted Sunday that it is investigating allegations that Shaw had an inappropriate relationship with a direct report.
“Shaw’s departure has nothing to do with performance, financial reporting or operating results,” the company said in a statement, adding that Shaw was terminated for cause.
The company also said it fired Nabanita Nag, Norfolk Southern’s chief legal officer, with whom Shaw had a consensual relationship.
Reuters previously reported that George, who was in the running for the top job when Shaw was appointed in 2022, was a candidate to replace him.
Reuters previously reported that executives and lawyers were discussing the terms of a possible severance package for Shaw, including a severance package, according to two sources.
Shaw had been with the company for decades and led it through the disastrous 2023 derailment in East Palestine, Ohio. The claims settlement is expected to cost the company more than $1 billion.
The investigation into Shaw’s conduct comes months after the CEO survived a bitter power struggle with activist hedge fund Ancora Holdings, with investors electing three new directors to the company’s 13-member board.
George will join the board of directors, the company said.
Claude Mongeau, Chairman of the Board of Directors and Director since 2019, praised George for his financial experience and operational expertise.
“He embodies our corporate values and is a champion of our safety culture. Working closely with our accomplished chief operating officer, John Orr, they will continue to improve Norfolk Southern’s operational performance,” Mongeau said in the statement.
(Reporting by Svea Herbst-Bayliss; Editing by Jamie Freed and Cynthia Osterman)
