(NewsNation) — Norfolk Southern CEO Alan Shaw received a 37% raise last year, bringing his total compensation to $13.4 million even as the railroad struggled following the toxic train derailment in East Palestine, Ohio.
The compensation figures come from the company’s latest proxy statement filed with the U.S. Securities and Exchange Commission (SEC) this week. Shaw’s base salary went from $200,000 in 2022 to $1.1 million in 2023. His stock and options awards also increased from the year prior, growing from $7.8 million to $10 million.
Shaw took over as CEO of the Atlanta-based railroad in May 2022, so part of the increase reflects 2023 being his first full year on the job.
The CEO’s raise came as Norfolk Southern’s operating income plummeted more than 40% year-over-year thanks to a $1.1 billion hit stemming from the fiery derailment in Eastern Ohio. In January, the railroad announced plans to cut 7% of its managers this year.
The problems at Norfolk Southern have set off a proxy fight led by Ancora Holdings, an investor group seeking to oust Shaw and install eight board members of its own.
“Norfolk Southern, which has exceptional rail workers and the country’s best customers, has suffered for years due to its Board’s poor decisions with regard to the Company’s leadership, safety priorities and strategy,” Ancora said in a recent presentation.
The investor group said Shaw has been allowed to “continue wasting money” on “self-serving lobbying and public relations strategies” rather than focus on safety initiatives, calling last year’s derailment “preventable.”
Norfolk Southern is urging shareholders to back the current management team and reject the attempted takeover, criticizing the plan as “short-sighted.”
“We are confident that the continued execution of our balanced strategy — under the vision and leadership of Alan Shaw — is critical as we prioritize operational rigor, safety, and service,” board chair Amy Miles said in a release.
Three rail unions have issued statements supporting the current Norfolk Southern management team, the Associated Press reported.
“Since the derailment last year, NS’ CEO has risen to the occasion and, through his leadership, NS has become a safer, more efficient and customer focused company again,” Jerry G. Sturdivant, a Brotherhood of Locomotive Engineers and Trainmen general chairman at Norfolk Southern said Monday, per AP.
Last year, Norfolk Southern saw the fewest mainline accidents since 1999, noting a 42% reduction in the mainline accident rate in 2023, the railroad said in a release.
In January, Norfolk Southern became the first major freight railroad to join a federal program that allows employees to report safety concerns anonymously without fear of discipline.
As part of its response to the proxy battle, the railroad has nominated two new board members — a former CEO of Amtrak and a former U.S. Senator.
Last year’s derailment in East Palestine didn’t result in any fatalities but has left community members worried about their long-term health as many continue to experience strange symptoms.
A preliminary investigation determined that an overheated wheel bearing was likely to blame. The final report from the National Transportation Safety Bureau will come out in June.