Investor Group Asks Norfolk Southern Chair Amy Miles to Address Decisions to Raise CEO Pay 37% and Run a Scorched-Earth Campaign - Seite 2

We ask that the Board reflect on the points below before continuing to spend Norfolk Southern’s money, time and reputational currency on a scorched-earth campaign that will forever be associated with the incumbent directors.

I. Shareholders are confounded by the Board’s decision to award Mr. Shaw a raise for 2023.

It is astonishing to us that the Board would reward Mr. Shaw with a 37% increase in the value of compensation to a total of $13.4 million for a year in which the Company’s customers, employees, shareholders and community partners all suffered.¹ This figure includes more than $10 million in stock and option awards, which were granted to Mr. Shaw even though he missed all six annual incentive targets pertaining to financial performance, customer service and safety.² To add insult to injury, Mr. Shaw appears to be a major beneficiary of the “East Palestine Adjustment” that increased Performance Stock Unit payout percentages from 56% to 96.3% of target.³

We challenge the Board’s determination that it had to adjust executive compensation in 2023 to “retain key talent.”⁴ We do not see how the Board could have actually viewed Mr. Shaw as a flight risk. In addition to being a more than 30-year insider at Norfolk Southern, he was a relatively new, unproven CEO off to an extremely rocky start. The fact that this decision was made suggests concerning deference to management and a lack of respect for shareholders and stakeholders.

While we recognize policymakers will not determine the outcome of the vote at the Annual Meeting, we are nonetheless surprised that the Board made a compensation decision that is a direct affront to President Joe Biden’s recent comments about greed and a lack of accountability at Norfolk Southern.⁵ There are numerous examples of boards of directors taking the responsible step of reducing – not raising – executive pay following disasters. In situations we deem comparable to the East Palestine derailment, like BP p.l.c.’s 2010 oil spill and The Boeing Company’s 737 MAX accidents, boards of directors typically terminate or hold the CEO accountable. To the contrary, Norfolk Southern’s Board instead rewarded its CEO with a massive pay raise, elevating his compensation to more than 100x that of the median employee.⁶