Norfolk Southern Corporation announced the dismissal of CEO Alan Shaw, following an internal investigation into his involvement in a consensual relationship with the company’s chief legal officer, Nabanita Nag.
Both executives have been terminated from their positions on Wednesday due to violations of company policies, the railroad operator revealed in a statement.
Shaw’s firing comes just two years after he assumed the role of CEO. His tenure was marked by challenges, including labor disputes, a high-profile train derailment in East Palestine, Ohio, and a proxy fight with an activist shareholder group. The derailment, which released toxic chemicals into the environment, sparked health concerns and criticism over the company’s handling of the aftermath.
Norfolk Southern’s board unanimously decided to replace Shaw with Chief Financial Officer Mark George, who has been appointed as the company’s new CEO. The board expressed confidence in George’s leadership abilities, citing his commitment to safety and corporate values.
The investigation into Shaw’s conduct began over the weekend, with Norfolk Southern emphasizing its strict adherence to ethical standards. While the relationship in question was consensual, both Shaw and Nag were found to have violated the company’s code of ethics. Shaw’s dismissal “for cause” could affect his eligibility for an exit package, typically granted to departing executives.
Shaw, who had been with Norfolk Southern since 1994, held various leadership roles before becoming CEO in 2022. Despite surviving a shareholder vote earlier this year, he was ultimately unable to withstand scrutiny regarding his personal conduct.
The company’s stock saw a slight dip following the announcement of Shaw’s termination but remained largely stable in after-hours trading.
With input from CNN, Fortune, Market Watch, NDTV World.
