XML 125 R2.htm IDEA: XBRL DOCUMENT v3.24.0.1
Pay vs Performance Disclosure
 12 Months Ended 20 Months Ended 83 Months Ended
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Dec. 31, 2023
Apr. 30, 2022
Pay vs Performance Disclosure            
Pay vs Performance Disclosure, Table
PAY VERSUS PERFORMANCE TABLE AND RELATED DISCLOSURE
 
                    
Value of Initial Fixed $100 
Investment on December 31, 
2019, Based On:
 
      
Year
   
Summary
Compensation
Table Total
for PEO 1
($)
(1)
   
Summary
Compensation
Table Total
for PEO 2
($)
(2)
   
Compensation Actually Paid to PEO 1
($)
(1)(4)
   
Compensation Actually Paid to PEO 2
($)
(2)(4)
   
Average Summary Compensation Total for Non-
PEO NEOs
($)
(3)
   
Average Compensation Actually Paid to
Non-PEO
NEOs
($)
(3)
   
Norfolk
Southern
Total Shareholder Return
($)
   
Peer Group Total Shareholder Return
($)
(5)
   
Net Income
(in millions)
($)
   
After-Tax 
Return on 
Average 
Invested 
Capital 
(%)
(6)
 
(a)
   
(b)
   
(b)
   
(c)
   
(c)
   
(d)
   
(e)
   
(f)
   
(g)
   
(h)
   
(i) 
2023
   
13,418,978
        
4,077,950
        
3,478,630
   
1,402,195
   
132
   
148
   
1,827
   
11.4 
2022
   
9,770,910
   
9,615,456
   
10,444,401
   
1,969,194
   
4,239,302
   
4,343,073
   
134
   
130
   
3,270
   
14.1 
                     
2021
        
14,016,942
        
25,072,294
   
4,059,729
   
5,783,924
   
159
   
155
   
3,005
   
12.7 
2020
        
14,125,279
        
12,202,837
   
3,976,507
   
2,785,700
   
125
   
122
   
2,013
   
10.4 
 
 
(1)
PEO 1: Alan H. Shaw has been our Chief Executive Officer since May 1, 2022.
 
 
(2)
PEO 2: James A. Squires was our Chief Executive Officer from June 1, 2015, to May 1, 2022.
 
 
(3)
The following
non-principal
executive officer (PEO) named executive officers (NEOs) are reflected in the averages: For 2023, Mr. George, Mr. Duncan, Ms. Adams, and Mr. Elkins. For 2022, Mr. George, Ms. Sanborn, Ms. Adams, and Mr. Elkins. For 2021, Mr. Shaw, Mr. George, Ms. Sanborn, and Ms. Adams. For 2020, Mr. Shaw, Mr. George, Ms. Sanborn, Ms. Adams, Mr. Scheib, and Mr. Wheeler.
 
 
(4)
To calculate 2023 compensation actually paid, the following amounts were deducted from and added to Summary Compensation Table total compensation:
Summary Compensation Table to Compensation Actually Paid Reconciliation
 
    
 
PEO 1
Alan H. Shaw
 
    
 
 
 
      
 
Average of Non-PEO

Named Executive Officers
 
  
  Components of Compensation
   
2023
($)
       
 
     
 
  
2023
($)
  
Summary Compensation Table (SCT) Total
   
 
13,418,978
 
    
 
    
 
  
 
3,478,630
 
Deductions From SCT Total
         
Stock Awards and Option Awards Value
   
 
10,000,331
 
      
 
2,200,920
 
Change in Pension Value and Nonqualified Deferred Compensation Earnings
 
   
 
2,171,580
 
          
 
582,978
 
Additions to SCT Total (i)
         
Year-End
Fair Value of Equity Awards
Granted During the Year Remaining Unvested
   
 
3,661,626
 
      
 
1,021,970
 
Change in Value During the Year of
Prior-Year Awards Remaining Unvested
   
 
(1,213,133
) 
      
 
(410,891
) 
Change in Value During the Year of
Prior-Year Awards Vesting During the Year
   
 
(225,683
) 
      
 
(123,238
) 
Dividend Equivalent Payments Made on Unvested Awards
   
 
357,116
 
      
 
100,656
 
Current-Year Pension Service Cost
   
 
250,957
 
      
 
118,966
 
Value of Changes in Pension Plan
   
 
0
 
          
 
0
 
Compensation Actually Paid
   
 
4,077,950
 
          
 
1,402,195
 
 
 
(i)
Amounts were calculated in accordance with the SEC methodology for determining compensation actually paid for each year shown. Fair values for equity awards were determined as of each measurement date using valuation methodologies and assumptions consistent with those used to estimate fair value at grant under US GAAP. The valuation assumptions used to estimate the
year-end
fair value of PSUs differed from those used for grant-date estimates in that they took into account the
 
 
 
most recent estimated earnout percentage of the awards at each year end, and updated Monte Carlo simulations of relative total shareholder returns for Norfolk Southern and the relevant peer companies; and the vesting-date value of PSUs was calculated using the actual earnout percentage for the performance period.
Year-end
and vesting-date valuations of outstanding stock options used a shorter expected option term than the 7 years used for grant-date fair values to take into account the passage of time, and used updated risk-free interest rates to reflect changes in market interest rates between the grant date and the valuation dates. Both the
year-end
and vesting date valuations of PSUs, stock options, and RSUs used current share prices as of each valuation date, rather than the grant-date share price.
 
 
(5)
The peer group total shareholder return calculations are based on the Standard & Poor’s (S&P) Railroad Stock Price Index.
 
 
(6)
After-tax
ROAIC used here is a
non-GAAP
financial measure and is calculated by dividing Norfolk Southern’s net operating profit
after-tax
(defined as net income excluding interest expense, taxes on interest, and interest on operating lease liabilities, and adjusted for the effect of capitalizing Norfolk Southern’s operating lease obligations) by the average invested capital (defined as the average of the current and prior
year-end
shareholders’ equity and total debt balances, which is then adjusted for the effect of capitalizing Norfolk Southern’s operating lease obligations). As described in the Compensation Discussion and Analysis, 2023 ROAIC is adjusted for the accounting charges relating to the East Palestine derailment and to exclude the effects of the acquisition of the Cincinnati Southern Railway. Excluding such adjustments, 2023 ROAIC would have been 8.4%.
         
Company Selected Measure Name After-tax ROAIC          
Named Executive Officers, Footnote The following
non-principal
executive officer (PEO) named executive officers (NEOs) are reflected in the averages: For 2023, Mr. George, Mr. Duncan, Ms. Adams, and Mr. Elkins. For 2022, Mr. George, Ms. Sanborn, Ms. Adams, and Mr. Elkins. For 2021, Mr. Shaw, Mr. George, Ms. Sanborn, and Ms. Adams. For 2020, Mr. Shaw, Mr. George, Ms. Sanborn, Ms. Adams, Mr. Scheib, and Mr. Wheeler. 		         
Peer Group Issuers, Footnote The peer group total shareholder return calculations are based on the Standard & Poor’s (S&P) Railroad Stock Price Index.          
Adjustment To PEO Compensation, Footnote
 
(4)
To calculate 2023 compensation actually paid, the following amounts were deducted from and added to Summary Compensation Table total compensation:
Summary Compensation Table to Compensation Actually Paid Reconciliation
 
    
 
PEO 1
Alan H. Shaw
 
    
 
 
 
      
 
Average of Non-PEO

Named Executive Officers
 
  
  Components of Compensation
   
2023
($)
       
 
     
 
  
2023
($)
  
Summary Compensation Table (SCT) Total
   
 
13,418,978
 
    
 
    
 
  
 
3,478,630
 
Deductions From SCT Total
         
Stock Awards and Option Awards Value
   
 
10,000,331
 
      
 
2,200,920
 
Change in Pension Value and Nonqualified Deferred Compensation Earnings
 
   
 
2,171,580
 
          
 
582,978
 
Additions to SCT Total (i)
         
Year-End
Fair Value of Equity Awards
Granted During the Year Remaining Unvested
   
 
3,661,626
 
      
 
1,021,970
 
Change in Value During the Year of
Prior-Year Awards Remaining Unvested
   
 
(1,213,133
) 
      
 
(410,891
) 
Change in Value During the Year of
Prior-Year Awards Vesting During the Year
   
 
(225,683
) 
      
 
(123,238
) 
Dividend Equivalent Payments Made on Unvested Awards
   
 
357,116
 
      
 
100,656
 
Current-Year Pension Service Cost
   
 
250,957
 
      
 
118,966
 
Value of Changes in Pension Plan
   
 
0
 
          
 
0
 
Compensation Actually Paid
   
 
4,077,950
 
          
 
1,402,195
 
 
 
(i)
Amounts were calculated in accordance with the SEC methodology for determining compensation actually paid for each year shown. Fair values for equity awards were determined as of each measurement date using valuation methodologies and assumptions consistent with those used to estimate fair value at grant under US GAAP. The valuation assumptions used to estimate the
year-end
fair value of PSUs differed from those used for grant-date estimates in that they took into account the
 
 
 
most recent estimated earnout percentage of the awards at each year end, and updated Monte Carlo simulations of relative total shareholder returns for Norfolk Southern and the relevant peer companies; and the vesting-date value of PSUs was calculated using the actual earnout percentage for the performance period.
Year-end
and vesting-date valuations of outstanding stock options used a shorter expected option term than the 7 years used for grant-date fair values to take into account the passage of time, and used updated risk-free interest rates to reflect changes in market interest rates between the grant date and the valuation dates. Both the
year-end
and vesting date valuations of PSUs, stock options, and RSUs used current share prices as of each valuation date, rather than the grant-date share price.
         
Non-PEO NEO Average Total Compensation Amount $ 3,478,630 $ 4,239,302 $ 4,059,729 $ 3,976,507    
Non-PEO NEO Average Compensation Actually Paid Amount $ 1,402,195 4,343,073 5,783,924 2,785,700    
Adjustment to Non-PEO NEO Compensation Footnote
 
(4)
To calculate 2023 compensation actually paid, the following amounts were deducted from and added to Summary Compensation Table total compensation:
Summary Compensation Table to Compensation Actually Paid Reconciliation
 
    
 
PEO 1
Alan H. Shaw
 
    
 
 
 
      
 
Average of Non-PEO

Named Executive Officers
 
  
  Components of Compensation
   
2023
($)
       
 
     
 
  
2023
($)
  
Summary Compensation Table (SCT) Total
   
 
13,418,978
 
    
 
    
 
  
 
3,478,630
 
Deductions From SCT Total
         
Stock Awards and Option Awards Value
   
 
10,000,331
 
      
 
2,200,920
 
Change in Pension Value and Nonqualified Deferred Compensation Earnings
 
   
 
2,171,580
 
          
 
582,978
 
Additions to SCT Total (i)
         
Year-End
Fair Value of Equity Awards
Granted During the Year Remaining Unvested
   
 
3,661,626
 
      
 
1,021,970
 
Change in Value During the Year of
Prior-Year Awards Remaining Unvested
   
 
(1,213,133
) 
      
 
(410,891
) 
Change in Value During the Year of
Prior-Year Awards Vesting During the Year
   
 
(225,683
) 
      
 
(123,238
) 
Dividend Equivalent Payments Made on Unvested Awards
   
 
357,116
 
      
 
100,656
 
Current-Year Pension Service Cost
   
 
250,957
 
      
 
118,966
 
Value of Changes in Pension Plan
   
 
0
 
          
 
0
 
Compensation Actually Paid
   
 
4,077,950
 
          
 
1,402,195
 
 
 
(i)
Amounts were calculated in accordance with the SEC methodology for determining compensation actually paid for each year shown. Fair values for equity awards were determined as of each measurement date using valuation methodologies and assumptions consistent with those used to estimate fair value at grant under US GAAP. The valuation assumptions used to estimate the
year-end
fair value of PSUs differed from those used for grant-date estimates in that they took into account the
 
 
 
most recent estimated earnout percentage of the awards at each year end, and updated Monte Carlo simulations of relative total shareholder returns for Norfolk Southern and the relevant peer companies; and the vesting-date value of PSUs was calculated using the actual earnout percentage for the performance period.
Year-end
and vesting-date valuations of outstanding stock options used a shorter expected option term than the 7 years used for grant-date fair values to take into account the passage of time, and used updated risk-free interest rates to reflect changes in market interest rates between the grant date and the valuation dates. Both the
year-end
and vesting date valuations of PSUs, stock options, and RSUs used current share prices as of each valuation date, rather than the grant-date share price.
         
Compensation Actually Paid vs. Total Shareholder Return
Compensation Actually Paid Compared to TSR
As shown in the chart below, compensation actually paid (“CAP”) to the PEOs and the
non-PEO
NEOs is aligned with total shareholder return on Norfolk Southern’s stock. This is primarily because the majority of compensation to the Named Executive Officers is in the form of long-term, stock-based incentives which are tied directly to stock price, as described in the CD&A report. Mr. Squires’ CAP was reduced substantially in 2022 due to his retirement on May 1 and the resulting
pro-rata
forfeiture of the stock incentives granted to him in that year, and partial-year payment of his salary and annual incentive award. Norfolk Southern’s cumulative TSR compared favorably with the peer group for 2020 through 2022, and declined somewhat in 2023 largely due to the effects of the East Palestine derailment.
 
LOGO
         
Compensation Actually Paid vs. Net Income
Compensation Actually Paid Compared to Net Income
As shown in the chart below, CAP to the PEOs and other NEOs is generally, but not directly, aligned with net income. This is primarily because the majority of compensation to the named executive officers is in the form of long-term, stock-based incentives which are sensitive to changes in stock price. Compensation to our Named Executive Officers is not tied directly to net income, although annual incentive awards are partially based on operating income.
 
LOGO
         
Compensation Actually Paid vs. Company Selected Measure
Compensation Actually Paid Compared to ROAIC
As described in the CD&A report, three-year average ROAIC is the primary performance measure that determines the number of shares earned under our PSU awards, and 50% or more of our Named Executive Officers’ long-term
incentiv
e awards are made in PSUs. Because of ROAIC’s impact on the number of PSU awards earned, we believe that
after-tax
ROAIC is the most important financial performance measure used in determining CAP to our Named Executive Officers. As required by SEC guidance, we are presenting our
one-year
ROAIC for each listed year, rather than our three-year average ROAIC.
As shown in the chart below, Norfolk Southern’s annual
after-tax
ROAIC increased significantly between 2000 and 2022, and declined in 2023, and CAP to the PEOs and other NEOs is generally aligned with this performance measure. However, because the majority of compensation to the named executive officers is in the form of stock-based incentives, total shareholder return has a more significant effect on CA
P.
 
LOGO
         
Total Shareholder Return Vs Peer Group
Compensation Actually Paid Compared to TSR
As shown in the chart below, compensation actually paid (“CAP”) to the PEOs and the
non-PEO
NEOs is aligned with total shareholder return on Norfolk Southern’s stock. This is primarily because the majority of compensation to the Named Executive Officers is in the form of long-term, stock-based incentives which are tied directly to stock price, as described in the CD&A report. Mr. Squires’ CAP was reduced substantially in 2022 due to his retirement on May 1 and the resulting
pro-rata
forfeiture of the stock incentives granted to him in that year, and partial-year payment of his salary and annual incentive award. Norfolk Southern’s cumulative TSR compared favorably with the peer group for 2020 through 2022, and declined somewhat in 2023 largely due to the effects of the East Palestine derailment.
 
LOGO
         
Tabular List, Table
Most Important Performance Measures to Link Compensation Actually Paid to Company Performance
The four measures listed below represent the most important performance measures we used to link compensation actually paid to our Named Executive Officers in 2023 to Company performance, as described in the Compensation Discussion and Analysis (“CD&A”) sections titled “2023 Annual Incentives” and “Long-Term Incentive Awards.”
 
Most Important Performance Measures
After-Tax
Return On Average Invested Capital
 
Operating Income
Annual Revenue
Total Shareholder Return
          
Total Shareholder Return Amount $ 132 134 159 125    
Peer Group Total Shareholder Return Amount 148 130 155 122    
Net Income (Loss) $ 1,827,000,000 $ 3,270,000,000 $ 3,005,000,000 $ 2,013,000,000    
Company Selected Measure Amount 0.114 0.141 0.127 0.104    
PEO Name         Alan H. Shaw James A. Squires
Measure:: 1            
Pay vs Performance Disclosure            
Name After-Tax Return On Average Invested Capital          
Non-GAAP Measure Description
After-tax
ROAIC used here is a
non-GAAP
financial measure and is calculated by dividing Norfolk Southern’s net operating profit
after-tax
(defined as net income excluding interest expense, taxes on interest, and interest on operating lease liabilities, and adjusted for the effect of capitalizing Norfolk Southern’s operating lease obligations) by the average invested capital (defined as the average of the current and prior
year-end
shareholders’ equity and total debt balances, which is then adjusted for the effect of capitalizing Norfolk Southern’s operating lease obligations). As described in the Compensation Discussion and Analysis, 2023 ROAIC is adjusted for the accounting charges relating to the East Palestine derailment and to exclude the effects of the acquisition of the Cincinnati Southern Railway. Excluding such adjustments, 2023 ROAIC would have been 8.4%. 		         
Measure:: 2            
Pay vs Performance Disclosure            
Name Operating Income          
Measure:: 3            
Pay vs Performance Disclosure            
Name Annual Revenue          
Measure:: 4            
Pay vs Performance Disclosure            
Name Total Shareholder Return          
Alan H. Shaw [Member]            
Pay vs Performance Disclosure            
PEO Total Compensation Amount $ 13,418,978 $ 9,770,910        
PEO Actually Paid Compensation Amount 4,077,950 10,444,401        
Alan H. Shaw [Member] | Stock Awards and Option Awards Value [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 10,000,331          
Alan H. Shaw [Member] | Change in Pension Value and Nonqualified Deferred Compensation Earnings [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 2,171,580          
Alan H. Shaw [Member] | YearEnd Fair Value of Equity Awards Granted During the Year Remaining Unvested [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 3,661,626          
Alan H. Shaw [Member] | During the Year of PriorYear Awards Remaining Unvested [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount (1,213,133)          
Alan H. Shaw [Member] | During the Year of PriorYear Awards Vesting During the Year [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount (225,683)          
Alan H. Shaw [Member] | Dividend Equivalent Payments Made on Unvested Awards [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 357,116          
Alan H. Shaw [Member] | CurrentYear Pension Service Cost [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 250,957          
Alan H. Shaw [Member] | Value of Changes in Pension Plan [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 0          
James A. Squires [Member]            
Pay vs Performance Disclosure            
PEO Total Compensation Amount   9,615,456 $ 14,016,942 $ 14,125,279    
PEO Actually Paid Compensation Amount   $ 1,969,194 $ 25,072,294 $ 12,202,837    
Non-PEO NEO | Stock Awards and Option Awards Value [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 2,200,920          
Non-PEO NEO | Change in Pension Value and Nonqualified Deferred Compensation Earnings [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 582,978          
Non-PEO NEO | YearEnd Fair Value of Equity Awards Granted During the Year Remaining Unvested [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 1,021,970          
Non-PEO NEO | During the Year of PriorYear Awards Remaining Unvested [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount (410,891)          
Non-PEO NEO | During the Year of PriorYear Awards Vesting During the Year [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount (123,238)          
Non-PEO NEO | Dividend Equivalent Payments Made on Unvested Awards [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 100,656          
Non-PEO NEO | CurrentYear Pension Service Cost [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount 118,966          
Non-PEO NEO | Value of Changes in Pension Plan [Member]            
Pay vs Performance Disclosure            
Adjustment to Compensation, Amount $ 0