Company remains committed to enhancing safety
and aligning management with shareholders' interests
ATLANTA, March 4,
2024 /PRNewswire/ -- Norfolk Southern
Corporation (NYSE: NSC) is focused on executing its strategy,
competing on operational excellence by balancing safe, reliable,
resilient service with continuous productivity improvement and
smart, sustainable growth. With recent mischaracterizations of the
facts, it is necessary for Norfolk Southern to correct the record.
The company issued the following statement Monday, highlighting its
safety achievements and the board's efforts to align management
with shareholders' interests:
Misrepresenting our safety
record
It is unfortunate that a serious situation is
being used to mislead stakeholders and to advance a proxy fight
narrative. On March 2, Norfolk
Southern quickly responded to a derailment in Lower Saucon Township, PA. The derailment
resulted in no harm to the community and no hazardous material
concerns from the railcars. We take this incident seriously and
work hard to avoid all accidents. The National Transportation
Safety Board is investigating this incident, and we will work
closely with them to understand how it happened and prevent others
like it.
Norfolk Southern is leading the industry when
it comes to safety. As a result of our robust safety
initiatives, Norfolk Southern achieved a 42% reduction in our
mainline accident rate year-over-year in 2023. Today, the company's
mainline accident rate is the lowest it has been in years and is
among the best of the North American Class I rails. We are actively
building on these achievements and helping the industry become even
safer.
We are committed to building on our safety
track record and setting the gold standard for rail safety. We
know there is no single solution when it comes to safety. Last
year, we initiated a six-point safety plan and made necessary
investments to accelerate enhancements to our safety culture and
operational transformation. This included installing cutting-edge
digital train inspection portals, implementing enhanced employee
training, and being the first Class I railroad to join the Federal
Railroad Administration's Confidential Close Call reporting system.
We are incorporating feedback from our labor leaders and partnering
on new safety initiatives. We also hired Atkins Nuclear Secured as
an independent safety consultant. With significant project
management and Nuclear Navy experience, they have conducted a
comprehensive safety assessment, and we are implementing changes
based on their recommendations.
Distorting the facts on management
compensation
Similarly, the facts about the compensation
of Norfolk Southern's management team have been distorted. The
Norfolk Southern Board took clear and decisive action in its 2023
compensation decisions, including exercising discretion to
eliminate annual performance-based incentive payouts for 2023.
The board is committed to best-in-class corporate governance
practices. Contrary to Ancora's claims, the board did not "raise
CEO pay 37%". The board's purposeful efforts to maintain alignment
between management and shareholders' interests though our
compensation program are clear:
-
- Compared to his target compensation, in 2023 CEO
Alan Shaw saw a 33% reduction in his
realizable compensation at year end. The difference in his
compensation for 2023 compared to 2022 reflects the fact that 2023
was his first full year as CEO.
- The board used its discretionary authority to eliminate the
2023 annual incentive awards for the CEO and all the company's
executive vice presidents. This decisive action reflects
the board's focus on ensuring alignment between executive pay
outcomes and the outcomes experienced by our shareholders and other
stakeholders during 2023.
- 92% of Shaw's target compensation was provided in the form
of at-risk or performance-based incentives with value tied
to the achievement of preset, rigorous performance goals or our
stock price performance.
- Specifically, 60% of Shaw's equity awards issued in 2023 are
performance-based and will only be earned if certain
metrics and targets are met in the future, at the end of the
three-year performance period. The remaining 40% is delivered
in a mix of restricted stock units and stock options that vest over
four years with value directly tied to our stock price
performance.
- Adjustments related to East Palestine were implemented to
establish a precedent that would ensure that sizable future
recoveries from insurance and third parties would not create a
windfall in future years.
Norfolk Southern's engagement with
Ancora
We have engaged constructively, and in good
faith, with Ancora in an effort to understand their views and avoid
a proxy contest. The Norfolk Southern Board remains open to any
opportunity to find a reasonable resolution, as outlined in our
preliminary proxy materials. However, it was after
thoughtful consideration that we determined Ancora's proposed
changes to the Norfolk Southern Board, management team, and
strategy would undermine the important progress we have made to
protect and enhance our business and franchise, and would lead to
the deterioration of shareholder value.
Norfolk Southern's definitive proxy materials will soon be
mailed out to all shareholders and include a WHITE card with voting
instructions. Shareholders' votes FOR only the 13 Norfolk
Southern director nominees on the WHITE card will be
critical.
In the interim, Norfolk Southern strongly urges shareholders to
simply discard and NOT vote using any blue proxy card sent by
Ancora.
About Norfolk Southern
Since 1827, Norfolk Southern Corporation (NYSE: NSC) and its
predecessor companies have safely moved the goods and materials
that drive the U.S. economy. Today, it operates a customer-centric
and operations-driven freight transportation network. Committed to
furthering sustainability, Norfolk Southern helps its customers
avoid approximately 15 million tons of yearly carbon emissions by
shipping via rail. Its dedicated team members deliver more than 7
million carloads annually, from agriculture to consumer goods, and
Norfolk Southern originates more automotive traffic than any other
Class I Railroad. Norfolk Southern also has the most extensive
intermodal network in the eastern U.S. It serves a majority of the
country's population and manufacturing base, with connections to
every major container port on the Atlantic coast as well as major
ports in the Gulf of Mexico and
Great Lakes. Learn more by visiting www.NorfolkSouthern.com.
Important Additional Information and Where to Find
It
The Company has filed a preliminary proxy statement
on Schedule 14A containing a form of WHITE proxy card with the
Securities and Exchange Commission (the "SEC") in connection with
the solicitation of proxies for its 2024 Annual Meeting of
Shareholders (the "2024 Annual Meeting"). The proxy statement is in
preliminary form and Norfolk Southern intends to file and mail a
definitive proxy statement (the "2024 Proxy Statement") to
shareholders of Norfolk Southern. SHAREHOLDERS ARE STRONGLY ADVISED
TO READ THE COMPANY'S 2024 PROXY STATEMENT (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO), THE WHITE PROXY CARD AND ANY
OTHER DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may
obtain a free copy of the preliminary proxy statement, 2024 Proxy
Statement, any amendments or supplements to the 2024 Proxy
Statement and other documents that the Company files with the SEC
from the SEC's website at www.sec.gov or
the Company's website at
https://norfolksouthern.investorroom.com
as soon as reasonably practicable after such materials are
electronically filed with, or furnished to, the SEC.
Certain Information Regarding Participants in
Solicitation
The Company, its directors and certain of
its executive officers and employees may be deemed participants in
the solicitation of proxies from shareholders in connection with
the matters to be considered at the 2024 Annual Meeting.
Information regarding the direct and indirect interests, by
security holdings or otherwise, of the persons who may, under the
rules of the SEC, be considered participants in the solicitation of
shareholders in connection with the 2024 Annual Meeting is included
in the Company's preliminary proxy statement for the 2024 Annual
Meeting, filed with the SEC on February 26,
2024, and will be included in Norfolk Southern's 2024 Proxy
Statement, once available. To the extent holdings by our directors
and executive officers of Norfolk Southern securities reported in
the preliminary proxy statement for the 2024 Annual Meeting have
changed, such changes have been or will be reflected on Statements
of Change of Ownership on Forms 3, 4 or 5 filed with the SEC. These
documents are available free of charge as described
above.
Forward Looking Statements
Certain statements in
this press release are "forward-looking statements" within the
meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, as amended. These statements relate
to future events or our future financial performance, including
statements relating to our ability to execute on our strategic plan
and our 2024 Annual Meeting and involve known and unknown risks,
uncertainties, and other factors that may cause our actual results,
levels of activity, performance, or our achievements or those of
our industry to be materially different from those expressed or
implied by any forward-looking statements. In some cases,
forward-looking statements may be identified by the use of words
like "may," "will," "could," "would," "should," "expect," "plan,"
"anticipate," "intend," "believe," "estimate," "project,"
"consider," "predict," "potential," "feel," or other comparable
terminology. The Company has based these forward-looking statements
on its current expectations, assumptions, estimates, beliefs, and
projections. While the Company believes these expectations,
assumptions, estimates, and projections are reasonable, such
forward-looking statements are only predictions and involve known
and unknown risks and uncertainties, many of which involve factors
or circumstances that are beyond the Company's control. These and
other important factors, including those discussed under "Risk
Factors" in our Annual Report on Form 10-K for the year ended
December 31, 2023, as well as the
Company's subsequent filings with the SEC, may cause actual
results, performance, or achievements to differ materially from
those expressed or implied by these forward- looking statements.
The forward-looking statements herein are made only as of the date
they were first issued, and unless otherwise required by applicable
securities laws, the Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/norfolk-southern-corrects-false-and-misleading-claims-302078533.html
SOURCE Norfolk Southern Corporation