Norfolk Southern investigates possible misconduct by CEO

Norfolk Southern is investigating possible misconduct by its CEO Alan Shaw.

The Atlanta-based freight railroad late Sunday said its board of directors has hired a law firm to conduct an independent probe into allegations that Shaw engaged in behavior inconsistent with the company's code of ethics and policy. A spokesperson declined  to elaborate on the possible misconduct.

CNBC cited people familiar with the matter in reporting ahead of Norfolk Southern's announcement that the investigation involves an alleged workplace relationship and that the process is in its early stages.

Shaw in May survived a bid to oust him as CEO over complaints including his handling of last year's toxic East Palestine, Ohio, train derailment and the poor performance of the company's stock.

Shaw started with Norfolk as a cost systems analyst in 1994, rising through its ranks to become CEO in May of 2022, according to a company bio of the executive.

Norfolk Southern operates in 22 states and is valued at more than $57 billion. As of midday Monday, its shares were up $3.50, or 1.4%, at $253.50.

Over the last 18 months, Shaw has faced pressure on multiple fronts. Last year, he had to deal with the worst railroad disaster in the past decade after a Norfolk Southern train derailed , spilled hazardous chemicals and caught fire in East Palestine, Ohio, prompting evacuations in February 2023.

This year Shaw had to fight to keep his job after activist investor Ancora Holdings nominated a full slate of board members in a bid to take control of the railroad and reform its operations, starting with firing Shaw. Ancora declined to comment on the investigation Monday. Three of its nominees did win seats on the railroad's board, but that wasn't enough to give it control.

—The Associated press contributed to this report.