Norfolk Southern fires CEO over 'consensual relationship' with chief legal officer
Norfolk Southern fired CEO Alan Shaw over an alleged affair with another employee of the railroad
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Norfolk Southern fired CEO Alan Shaw and Chief Legal Officer Nabanita Nag over an alleged affair between the two.
The railroad announced the terminations on Wednesday, saying that an investigation by the board found Shaw and Nag engaged in a "consensual relationship."
Shaw was replaced by Mark George, who had served as the company's chief financial officer. George is also now a member of the board.
Norfolk Southern CEO Alan Shaw testifies on the East Palestine, Ohio, train derailment before a U.S. Senate Environment and Public Works Committee hearing on Capitol Hill in Washington, D.C., on March 9, 2023. (Mary F. Calvert/Reuters / Reuters Photos)
The Wall Street Journal on Monday reported that Shaw was expected to depart Norfolk Southern by the end of the week, after the board announced its probe into Shaw's alleged misconduct over the weekend.
The Journal confirmed details from an earlier report by CNBC that the investigation was launched over allegations of an inappropriate workplace relationship.
When contacted by FOX Business, Norfolk Southern declined to comment beyond its statement about the investigation, which disclosed that the company had hired an outside law firm to look into allegations that Shaw potentially violated the company's code of ethics.
NORFOLK SOUTHERN CEO RECEIVED MAJOR PAY BOOST DESPITE EAST PALESTINE DERAILMENT
Shaw worked at Norfolk Southern for 30 years, rising through the ranks before taking over as CEO in 2022. According to the Journal, Shaw's wife, Tiffany, whom he met in college, previously worked at the railroad for several years.
The Journal also noted that Shaw promoted Nag to chief legal officer in 2022.
This video screenshot released by the U.S. National Transportation Safety Board shows the site of a derailed freight train in East Palestine, Ohio. (NTSB/Handout via Xinhua / Getty Images)
The board, of which Shaw was a member, had supported his leadership through the disastrous 2023 derailment in East Palestine, Ohio, and defended him against an effort by activist investors to replace the railroad's entire leadership team earlier this year.
EXPECT MORE CEO EXITS OVER UNDISCLOSED PERSONAL RELATIONSHIPS WITH COLLEAGUES, EXPERT SAYS
A number of high-profile corporate leaders have lost their jobs in recent years for failing to fully disclose personal relationships with colleagues.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NSC | NORFOLK SOUTHERN CORP. | 268.95 | +4.69 | +1.77% |
Norfolk Southern Corp.
BP CEO Bernard Looney and Cboe Global Markets Chairman and CEO Edward Tilly both resigned from decades-long careers at their respective companies last year after boardroom investigations discovered they had not been entirely forthright about their relationships with fellow employees.
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McDonald's ousted former CEO Steve Easterbook in 2019 for engaging in a "consensual relationship with an employee," and former Intel CEO Brian Krzanich stepped down in 2018 after the semiconductor manufacturer found out he had a "past relationship with an Intel employee."