Norfolk Southern said Thursday that its new CEO's salary will jump to $1 million now that Mark George has been promoted from chief financial officer, and he will be eligible for a $2.25 million bonus and significant stock awards for performance.
George was previously making $675,000 as CFO, but he got the top job at the railroad Wednesday after Norfolk Southern's board fired Alan Shaw for having an inappropriate consensual relationship with the chief legal officer.
The Atlanta-based railroad disclosed the details of George's compensation in a filing with the Securities and Exchange Commission.
Norfolk Southern said Shaw won't receive any severance and will have to forfeit any outstanding stock awards because he was fired for cause.
Norfolk Southern has been at the center of a national examination of railroad safety ever since one of its trains derailed and caught fire in February 2023 in East Palestine, Ohio. Half the town had to evacuate when officials decided to blow open five tank cars of vinyl chloride and burn the plastic ingredient inside generating a huge plume of thick, black smoke.
Norfolk Southern said George will also receive $4 million in stock grants.
In January, George will be eligible for a long-term incentive grant of $10 million in stock.
The railroad said Shaw's firing was unrelated to the company's financial performance, and it expects to continue meeting its goals for this year as George will continue the planned overhaul of operations that began this spring while Norfolk Southern was fending off activist investor Ancora Holdings. Ancora was able to elect three directors but not enough to take control of the railroad and fire Shaw like it recommended.
Norfolk Southern is one of the nation's six largest railroads with tracks crossing the Eastern United States.
FILE - Norfolk Southern locomotives are moved through the Conway Terminal in Conway, Pa., June 17, 2023. (AP Photo/Gene J. Puskar, File)
FILE - Norfolk Southern Railroad CEO Alan Shaw speaks during an interview Wednesday, June 21, 2023, in Atlanta. (AP Photo/John Bazemore, File)
NEW YORK (AP) — U.S. stock indexes remained stuck in place on Tuesday as Wall Street made few big moves ahead of what’s expected to be the first cut to interest rates in more than four years.
The S&P 500 edged up by 1.49, or less than 0.1%, to 5,634.58. It remains 0.6% below its all-time closing high set in July, and it briefly rose above that mark during the morning.
The Dow Jones Industrial Average slipped 15.90 points, or less than 0.1%, to 41,606.18 from its own record set the day before, while the Nasdaq composite edged up by 35.93, or 0.2%, to 17,628.06.
Intel helped drive the market with a gain of 2.7% following a series of announcements, including an expansion of its partnership with Amazon Web Services to produce custom chips. Intel also detailed plans to build its foundry business.
That helped offset a 2.2% drop for Philip Morris International, which said it expects to record a loss of $220 million against its third-quarter results because of the sale of its Vectura Group inhaled-therapeutics subsidiary.
The calm movements for the U.S. stock market overall were a sharp departure from prior weeks, during which the S&P 500 briefly fell nearly 10% below its all-time high. At the time, global markets were reeling on worries that a slowing U.S. economy could fall into a recession, along with some technical factors that forced hedge funds around the world to back out of a popular trade all at once.
Since then, excitement has built about an announcement scheduled for Wednesday afternoon from the Federal Reserve. The unanimous expectation on Wall Street is that the Fed will cut the federal funds rate, which has been sitting in a range of 5.25% to 5.50% for more than a year.
Lower rates would make things easier for the economy, which has already begun to slow because it’s become so expensive to borrow money for everything from houses to cars to corporate debt. The Fed has been keeping its main interest rate at a two-decade high in hopes of grinding down on the economy enough to stifle high inflation.
Now that inflation is down substantially from its peak two summers ago, the Fed believes it can shift its focus more toward protecting the job market and economy. The only question is how much the Fed will cut rates by, and that is a delicate balancing act.
While lowering rates gives a boost to the overall economy and to financial markets, it can also give inflation more fuel. Some critics say the Fed is already moving too late to help the economy, while others warn of inflation staying stubbornly higher than it has in the past.
The general expectation on Wall Street is for the Fed to deliver a larger-than-usual cut of half of a percentage point on Wednesday, according to data from CME Group. But it’s not a certainty. Traders are still betting on a 35% probability for a traditional-sized move of a quarter of a percentage point,
Economic reports released Tuesday did little to change those expectations. One said U.S. shoppers spent more at retailers last month than expected. That’s an encouraging signal indicating strength for the heart of the U.S. economy, but details underneath the surface may have been more discouraging. After ignoring automobiles and fuel, sales at U.S. retailers last month were a touch weaker than economists expected.
“This data isn’t going to decide the issue for the Fed, one way or the other,” Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley, said about the size of Wednesday’s rate cut.
A separate report that came later in the morning said U.S. industrial production returned to growth in August and was stronger than economists expected.
In the bond market, the 10-year Treasury yield rose to 3.64% from 3.62% late Monday. The two-year yield, which more closely tracks expectations for the Fed’s actions, rose to 3.59% from 3.56%.
In stock markets abroad, Japan’s Nikkei 225 fell 1% after the value the Japanese yen ticked higher against the U.S. dollar.
The yen has been rising on expectations the Bank of Japan will continue to head in the opposite direction of the Federal Reserve and keep raising interest rates. A stronger yen can hurt the profits of Japan’s big exporters.
Stock indexes rose modestly across much of Europe, while markets were closed in mainland China and South Korea.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
The New York Stock Exchange, with a banner for American Eagle Outfitters, is shown on Tuesday, Sept. 17, 2024, in New York. (AP Photo/Peter Morgan)
FILE - The American flag hangs from the front of the New York Stock Exchange on Sept. 10, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - A person stands in front of an electronic stock board showing Japan's Nikkei index at a securities firm in Tokyo, on May 28, 2024. (AP Photo/Eugene Hoshiko, File)
FILE - People walk in front of Tokyo Stock Exchange building in Tokyo, on May 28, 2024. (AP Photo/Eugene Hoshiko, File)
