Following a U.S. Senate committee hearing with Norfolk Southern CEO Alan Shaw on Thursday, Democratic Sen. Jeff Merkley of Oregon expressed disappointment in the CEO's testimony and lack of details about specific actions the company would take to prevent future disasters. Merkley vowed to send in formal follow-up questions for the record to press Shaw about large cash awards a Scripps News investigation revealed executives at his company received.
The Scripps News investigation found Norfolk Southern repeatedly incentivized its executives to cut costs in ways critics say often came at the expense of safety.
Shaw, along with other Norfolk Southern executives, personally received millions of dollars in cash awards for their 2021 performance. Scripps News found the company justified this to the Securities and Exchange Commission, saying the payouts were partly because it had made its trains longer and heavier, and saved money elsewhere.
"I'm absolutely going to ask about that," Merkley said after hearing. "They have cut costs in every conceivable way on safety."
In the hearing, Shaw said his company will stay committed to the East Palestine community for as long as it takes.
"Norfolk Southern runs a safe railroad," Shaw told senators. "And it’s my commitment to improve that safety."
But a GAO report from late last year found the company hit a 10-year high in 2021 with its accident rate per million train miles.
During Thursday's hearing, Shaw was also also asked about the $69 million Norfolk Southern has spent in lobbying fees over the past decade. Scripps News previously reported those lobbying efforts included multiple attempts to oppose costly new safety measures.
OREGON SEN. JEFF MERKLEY: I just want to know, will your team lobby for safety improvements rather than against them?
NORFOLK SOUTHERN CEO ALAN SHAW: Senator, we will continue to follow the science. We will continue to follow data.
When pressed on his willingness to implement specific safety changes, Shaw repeatedly avoided commitment.
SEN. MERKLEY: Will you pledge today that you will do no more stock buybacks until a raft of safety measures have been completed to reduce the risk of derailments and crashes in the future?
SHAW: Senator, I will commit to invest in continuing to invest in safety. We invest over $1,000,000,000 a year.
SEN. MERKLEY: And you noted that you have a list of safety things you'd like to implement. Will you commit no more stock buybacks until those safety improvements are completed?
SHAW: So I will commit to continuing to invest in safety.
Railroad execs got cash, in part for 'record' train length
A Scripps News investigation found Norfolk Southern gave top leaders millions of dollars in awards after they hit a controversial financial target.
Senator Edward Markey also tried to push the CEO for more details.
MASSACHUSETTS SEN. EDWARD MARKEY: Will you commit to compensating effective homeowners for their diminished property values?
SHAW: I'm committed to do what's right.
SEN. MARKEY: Well, what's right is a family that had a home worth $100,000 that is now worth $50,000. We'll probably never be able to sell that home for 100,000 again. Will you compensate that family for that loss?
SHAW: Senator. I'm committed to do what's right.
SEN. MARKEY: That is the right thing to do.
Nathaniel Reed, Patrick Terpstra and Rosie Cima contributed reporting to this story. Contact the lead reporters on this story at mark.greenblatt@scripps.com and carrie.cochran@scripps.com.
