Alan Howard Shaw is the president and chief executive officer of Norfolk Southern, a Class I railroad operating freight trains in the United States. He has held the CEO position since May 1, 2022. ^{[1] [2]}

Early life

Shaw attended Virginia Tech and received a Bachelor of Science in Aerospace Engineering ^[3] in 1989 and a Master of Business Administration there in 1992. At Harvard Business School, he completed the General Management Program in 2012. ^{[4] [5] [6] [1] [7] [8]} He is a chartered financial analyst. ^[3]

Career

Prior to becoming president of Norfolk Southern in 2021 and CEO in 2022, Shaw was executive vice president and chief marketing officer at the company for six years. He had previously been vice president of intermodal operations at the company. His first vice president position at Norfolk Southern was vice president of chemicals, beginning in 2009. He also sits on the board of Virginia Wesleyan University. He sits on the boards of other educational institutions as well. ^{[2] [1] [9] [7] [8]}

When Shaw became CEO in 2022, he had 27 years of experience at Norfolk Southern in marketing, operations, and finance. ^[3]

In December 2022, Shaw announced a new strategy for Norfolk Southern at the company's Investor Day, the first since he became CEO, that placed less of a focus on operating ratio and precision scheduled railroading. Precision scheduled railroading is a method that the Class I railroads deployed to streamline operations, particularly during the COVID-19 pandemic. Shaw's strategy, instead, focuses on building the resources required to provide reliable service throughout the year, instead of frequently furloughing employees. The plan also includes investing in locomotives, track improvements, rail yards, technology, and employee training during economic downturns. ^{[10] [11] [12]}

He has drawn attention in the wake of the February 3, 2023 East Palestine railroad derailment of a 150-car train and chemical leakage in East Palestine, Ohio. ^[13] He visited the community in the week following the accident. He followed this with a public letter to the community, which began, "We will not walk away, East Palestine." On a second visit he met with the city's Mayor Trent Conaway, Congressman Bill Johnson, Fire Chief Keith Drabick, and first responders. ^{[14] [15]} On February 22, 2023, he appeared at a town hall on CNN hosted by Jake Tapper. In the town hall, he apologized to East Palestine residents, saying, "I'm terribly sorry for what has happened to your community." He added, "I want you to know that Norfolk Southern is here, and we're going to stay here. And we're going to make this right." ^[16]

Shaw's compensation in 2023 increased by 37% in his first full year as CEO. His total pay grew from $9.8 million (US) in 2022 to $13.4 million (US) in 2023, with base improving to $1.1 million and stock options rising from $2.2 million to $10 million. ^[17]

Some Norfolk Southern investors criticized Shaw for a “tone-deaf response” to the Ohio derailment and for being given a 37% pay raise following the derailment. ^[18] The same year as Shaw’s pay raise, the company reported a 44% loss in net income. ^[18] In his defense, Shaw pointed to the company’s response to several challenges in 2023, saying that the company’s performance is expected to improve in 2024 with productivity gains and operational discipline. ^[19]

Under Alan Shaw's management, Norfolk Southern has implemented several safety protocols as part of a six-point safety plan in which Norfolk Southern will add about 200 more hot bearing detectors to its rail network. ^[20]

In May 2023, Shaw and 12 union leaders, issued a safety letter to employees and union members committing to enhanced rail safety for employees and communities served by Norfolk Southern. ^[21]

Under Shaw, Norfolk Southern reported 37% fewer accidents on its main lines in the first 10 months of 2023 than in the same period of 2022. Norfolk Southern was the only one of the top five freight railroads with a decrease in accidents during this time period. ^[22]

While Norfolk Southern has donated to Ohio elected officials through its corporate PAC, Shaw has eschewed donating directly to politicians. Instead, he donates to the company’s good government fund. ^[23]

Shaw has pointed to resiliency as a key aspect of the company’s strategy. He has been praised for implementing customer-centric service and changing the culture. ^[24] In 2023, Shaw was awarded the Railroad Innovator Award by industry publications Progressive Railroading and Rail Trends. He has pointed to his upbringing as to how he developed the values of integrity and doing the right thing. ^[25]

Roughly half of Norfolk Southern’s unionized workers are supporting a proposal to remove Shaw at a May 2024 annual shareholder meeting. ^[26] However, the company said they have “full confidence in Shaw and his turnaround plan”. Two Teamsters unions representing employees announced they want Shaw replaced ^[27], while the AFL-CIO announced its support. ^[28] One of NS's largest customers, Cleveland-Cliffs, also publicly announced its support of removing Shaw. ^[29]

The Teamsters’ decision to support firing Shaw was influenced by Shaw’s hiring of John Orr as COO. ^[30] Shaw and NS had to pay $25 million to Orr’s former employer to hire him. ^[31] Some investors criticized the hire for what they consider to be an excessive buyout package coupled with a record of racial and sexual discrimination allegations. ^[32] NS, however, defended Shaw and Orr, pointing to Orr’s record of improving performance and safety. ^[32]

References