Norfolk Southern CEO sells stock and sets up scholarship fund for East Palestine
By Chris Isidore, CNN
Norfolk Southern CEO Alan Shaw sold $448,000 worth of the company’s stock this week, a month after the toxic train derailment in East Palestine, Ohio, that is still being cleaned up.
Shaw’s stock sale came the same week the company announced Shaw had personally set up a $445,000 scholarship endowment fund for seniors at East Palestine High School that an unspecified number of students will be able to use to attend college or vocational schools.
The stock sale was completed under terms of a pre-arranged plan put in place in May 2022, shortly after he was promoted to CEO. Company insiders often have such plans in place so that they can sell stock and not worry about trades being made with the benefit of insider information, which would be illegal.
In Shaw’s plan, he sells 2,000 shares of Norfolk Southern shares every three months. He sold 1,000 shares on June 1, a couple of weeks after setting up the plan, and then 2,000 shares on September 1, December 1 and March 1. In total he received $1.7 million for the sales of the stock.
Shares of Norfolk Southern are down 9% since the February 3 accident, and the $448,000 he received from the most recent sale was 13% less than the amount he received from his December sale.
Company insiders must report their stock purchases or sales, or the exercise of stock options, to the Securities and Exchange Commission so they are known to other investors.
Norfolk Southern did not respond to request for comments about the stock sale, and whether Shaw plans to reduce or donate more of his salary in the wake of the accident.
While his stock sale is typical for a CEO, it’s also an indication of how well paid he is running one of the nation’s four major freight railroads.
Norfolk Southern has yet to report his 2022 salary. It will likely do so later this month. Shaw did not become CEO until May 1 of last year, after serving as chief marketing officer through December of 2021, at which time he was promoted to president of the railroad as a transition to the CEO he was to assume five months later.
Shaw’s total compensation was $4.3 million in 2021. His predecessor as CEO, James Squires, received $14 million that year, which is more than the $12 million the railroad has said it paid to residents and community groups in East Palestine.
Shaw last year probably got paid less than Squires did in 2021, even though the company reported record profits last year. That’s in part because Shaw served only eight months as CEO. Shaw’s base salary of $950,000 is less than the $1.1 million Squires received his last full year on the job in 2021, and the $4.7 million target for bonuses and supplemental stock grants is less than the $8.6 million in stock and options that Squires received.
Although the railroad is forecast to continue raking in close-to-record profits, its stock could suffer from the publicity surrounding accident.
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