Norfolk Southern CEO Got a Pay Boost After Toxic East Palestine Crash
"We need full compensation for the families and workers affected by the East Palestine train derailment—not a $3.6 million raise for its CEO," wrote Sen. Ed Markey.
Norfolk Southern CEO Alan Shaw got a large raise last year after the train derailment in East Palestine, Ohio that devastated that community. Shaw's total compensation rose by 37% in 2023, which put it at over $13 million for the year.
The train derailment occurred in February of last year and exposed the community to toxic chemicals that caused a large fire. Though there were no human fatalities, the wreck sparked grave public health concerns and the company has faced major criticisms for what have been described as lax safety practices.
Jonathon Long, general chairman of the American Rail System Federation (ARSF) of the Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters (BMWED), wrote about the problems with the rail company in a letter last year.
"I am writing to share with you the level of disregard that Norfolk Southern has for the safety of the railroad's workers, its track structure, and East Palestine and other American communities where NS operates," he wrote. "They gamble with your money, and you hold all the risk if they lose by putting a toxic train in the ditch in your community."
Sen. Ed Markey (D-Mass.) criticized Shaw's compensation raise in a tweet on Monday.
A year later Norfolk Southern is still more focused on its bottom line than the safety of the communities it serves. We need full compensation for the families& workers affected by the East Palestine train derailment—not a $3.6 million raise for its CEO. https://t.co/1h74XgSvBh
— Ed Markey (@SenMarkey) February 27, 2024
Shaw's compensation increase last year came despite the fact the company's net income decreased by 44% in 2023. The company also increased its spending on lobbying by 30% last year. A group of shareholders from the firm Ancora Holdings is trying to replace Shaw and other members of the company's management with new leadership, because it doesn't feel Shaw is leading the company in the right direction.
"It's alarming that the board rewarded Mr. Shaw with a massive raise and total compensation of $13.4 million during the same year he presided over industry-worst operating results, sustained underperformance, and a tone-deaf response to the derailment in East Palestine," the group told CNN in a statement. "This failure of corporate governance … reinforces the need for sweeping changes to Norfolk Southern’s well-paid board."
The Department of Justice sued Norfolk Southern for violating the Clean Air Act last year, and the Supreme Court ruled in June of last year that a former Norfolk Southern employee who alleged he developed colon cancer after being exposed to hazardous chemicals could proceed with a lawsuit.
It remains to be seen how long Shaw will be in charge of Norfolk Southern, but the company has certainly had a tumultuous year since the disaster in East Palestine, and it doesn't seem he's yet paid a major price for what's happened under his leadership.
"Mr. Shaw and his boardroom allies have no credible plan and no viable record to run on," the investors from Ancora told CNN.
