Norfolk Southern CEO Caps Eventful 18 Months By Getting Fired for an Inappropriate Relationship With a Subordinate

You don’t hear a lot of updates about the disastrous East Palestine rail accident in national media these days. But the company behind it, Norfolk Southern, found its way back into the news anyway: this week, the company’s board unanimously fired CEO Alan Shaw, citing an inappropriate relationship with a subordinate as the cause.

The company only announced the opening of an investigation on Monday, saying it was looking into “potential conduct by CEO Alan Shaw that is inconsistent with the company’s Code of Ethics and company policy.” The next announcement on Wednesday simply celebrated the elevation of the executive VP and CFO Mark George into the top slot, adding a quick note about Shaw’s termination “for cause.”

Shaw’s run as CEO was… something. And since the crash has, again, largely departed from public consciousness, it’s worth a quick rundown as he makes his way out the door.

The derailment in East Palestine came on February 3, 2023, less than a year after Shaw’s appointment. The immediate aftermath of the accident was chaotic, and while the state and federal responses didn’t necessarily ease that chaos the company certainly was no champion either. A few weeks afterward, I obtained via a Freedom of Information Act request a call log for an Environmental Protection Agency hotline set up to respond to worried residents’ concerns; it was a wild document, full of terrified and angry people demanding unavailable answers about toxic sheens on fields and streams and sick children, even a call from the office of a U.S. Congressman stymied through other avenues, and more — including not a small amount of vitriol directed at Norfolk Southern.

“That was a joke,” one woman said about her attempts to get more information from the company. “They are just trying to push it under the rug. I am hoping you aren’t going to do the same.”

As it turned out, she wasn’t wrong. The National Transportation Safety Board later found that Shaw’s company sought to improperly influence the agency’s inquiries into the crash, making use of its position as a “party” to the official probe to try and deflect blame. “Norfolk Southern’s abuse of the party process was unprecedented and reprehensible,” the NTSB’s chair Jennifer Homendy said in June of this year.

The NTSB also found a litany of mistakes the company made in the immediate aftermath of the crash, including that the visually arresting “vent and burn” process was actually not necessary: “Norfolk Southern Railway and its contractors continued to assert the necessity of a vent and burn after expert opinion and available evidence should have led them to re-evaluate their initial conclusions,” the agency’s report found. According to a study published in Environmental Research Letters this June, that burn resulted in toxic chemicals deposited via rainfall across parts of 16 states, covering an area roughly twice the size of Texas.

In short, nothing went very well here. And the company, under Shaw’s delicate guidance, paid for it. In May of this year, Norfolk Southern agreed on a $310 million settlement with the Department of Justice and the EPA to pay for “past and future cleanup” as well as safety enhancements and other costs. Also this spring, the company agreed to pay $600 million to residents and businesses affected by the derailment and spills; after a late-August deadline, more than 54,000 claims have been filed under that settlement, and fewer than 400 households and 47 businesses opted out. In total, the company has said it has spent upwards of $1.7 billion relating to the crash.

So how has the company’s illustrious CEO fared through this rough patch? In 2021, he earned about $4.4 million in salary plus stock and other forms of compensation, per a company filing; in 2022, that rose to $9.8 million; in 2023, the year of the crash and all its aftermath, it jumped to $13.4 million. What the first eight months of this company brought isn’t clear.

And now, the kicker: days after launching their investigation, the company said: “Shaw violated company policies by engaging in a consensual relationship with the company’s Chief Legal Officer.” That officer, Nabanita Nag, has also been fired.

Ascend to top job, pull in hundreds of times your workers’ average salary, dump toxic chemicals all over the landscape, bully and cajole a federal regulatory agency into doing your bidding, pay out a billion dollars to get off the hook, abuse the workplace power dynamic in an inappropriate relationship, get fired — truly, a whirlwind speedrun through the executive class’s ever-grimier American dream.