Alan Shaw, CEO of Norfolk Southern, speaks to the press following the groundbreaking for the planned Norfolk Southern First Responder Regional Training Center. (File photo by Stephanie Elverd)

ATLANTA — A day after the Norfolk Southern board launched an investigation into potential misconduct of Alan Shaw, the Wall Street Journal reported late Monday that the beleaguered CEO is expected to step down.

The railroad confirmed that Shaw is under investigation for conduct that is potentially inconsistent with the company’s code of ethics and company policy.

“Norfolk Southern holds all its team members to the highest standards,” the NS said in a press release issued on Sunday. “In line with the company’s code of conduct and company policy, allegations of misconduct are thoroughly investigated.”

That investigation will be conducted by an independent law firm retained by the NS Board of Directors’ Audit Committee, NS said.

Norfolk Southern did not provide any other details concerning the alleged misconduct, but CNBC reported three sources close to the investigation had disclosed the probe was initiated by allegations that Shaw engaged in an inappropriate workplace relationship.

The investigation is the latest in a long list of troubles the CEO has faced since last year’s derailment of a Norfolk Southern freight train and subsequent chemical release. In the spring, the investment group Ancora led a failed proxy fight to oust Shaw as CEO, charging among other things that he mishandled the derailment. Shaw faced criticism for Norfolk Southern’s decision to reopen the tracks to rail traffic before evacuated East Palestine residents were allowed to return to their homes. He faced even heavier criticism for the decision to vent-and-burn 1.1 pounds of vinyl chloride over the village in the days following the derailment. The vent-and-burn event was later deemed “unnecessary” by the National Transportation and Safety Board (NTSB) who accused the railroad of withholding crucial information from Incident Command. Incident Command ultimately made the decision to vent and burn the five tank cars based on the railroad’s assertion an explosion was imminent. NTSB Chair Jennifer Hommendy went a step further and admonished Norfolk Southern for allegedly attempting to interfere with the agency’s investigation and influence its findings.

Shaw received more backlash when it was revealed just after the one-year anniversary of the rail disaster had passed that he received a significant raise, receiving a 37% increase and $13.4 million in total compensation. The news also came one month after Norfolk Southern reported costs to clean-up the derailment had already exceeded $1 billion.

In addition to the pricey remediation, the derailment has cost the railroad another $1 billion in derailment-related litigation. Norfolk Southern recently agreed to settle a class action lawsuit filed by residents for $600 million and agreed to pay $310 million to settle with the U.S. Environmental Agency and U.S. Department of Justice Department. NS still faces legal action from the State of Ohio.

Shaw was promoted to CEO in May of 2022, just nine months before the derailment. Before taking over the helm of the company, Shaw was executive vice president and chief marketing officer at the railroad for six years. He began his career at Norfolk Southern in 1994.

It is unclear what, if any, impact Shaw’s resignation would have on the communities impacted by the derailment. Despite Ancora’s charge that Shaw was “tone deaf” when it came to the derailment response, the CEO has spent considerable time in East Palestine, building relationships with village leaders and residents. He had said he would utilize all of Norfolk Southern’s resources to help the village and surrounding communities recover. Shaw has also used his own money. In 2023, Shaw established the “Bulldog Legacy Scholarship at East Palestine High School. The endowment was funded with a $445,000 personal contribution from Shaw.