They've gotten a hell of a lot of criticism, much of it
well deserved, but they deserve some credit for this.
Representative Seth Moulton of Massachusetts is talking
about important changes at Norfolk Southern. The
embattled owner of the train that derailed in February
in East Palestine, Ohio. The railroad just disclosed a
total overhaul of what can trigger millions of dollars
in cash awards for its executives. Senator I'm
committing to do what's right. It's a major shift in
corporate strategy that comes after an exclusive series
of Scripps news investigative reports that exposed how
the company paid out millions of dollars in cash to
executives for taking cost cutting actions that critics
say made trains longer and more dangerous. What our
Scripps news reporting revealed outraged members of
congress like Moulton who in early March promised to
push for change. This is a credit to you and your
investigation that we know about this now and we're
going to be zeroing in on this much more closely at the
time, Senator J D Vance piled on the pressure and
instead of paying, you know, massive bonuses to ceos, I
think we should be asking some tough questions abo
why we lag behind the rest of the world when it comes
to safety, they have cut costs in every conceivable way
on safety. After seeing our report, Senator Jeff
Merkley took action and formally wrote Norfolk Southern
demanding to know whether the railroad was going to
make changes and start directly incentivizing it
leaders to make the railroad safer. And just this week,
Norfolk Southern told Scripps News through a
spokesperson, the compensation of our entire management
team will now be based in part on performance on
related safety metrics saying we will continue working
to get better. The company's recent securities and
exchange commission filing show new triggers for cash
awards. They now include injury rates, accident rates
and even on time performance and what the company calls
its new strategy. Norfolk Southern changed course on
what had been the biggest driver of cash awards. A
controversial financial target on Wall Street as
the operating ratio which put a premium on squeezing
costs and increasing revenues. Critics say it
prioritized cost cutting over safety. The company
dropped it entirely operating ratio is gone from the
cash incentives. The disappearance of operating rati
from the bonus criteria for Norfolk Southern executives
is a major accomplishment. Steve Dittmeyer is the
Federal Railroad Administration former Director of
research. He spoke out in our first reports about how
the old focus on that controversial Wall Street
encouraged an emphasis on longer trains leading to
bigger pile ups. Norfolk Southern obviously felt
pressure from Congress from the news stories that
Scripps put out on this matter. And I think Alan S Shaw
and the board decided that this shift had to be made.
Norfolk Southern's new incentive structure for
executives ties 10% of its cash awards directly to
safety. I think that's on one hand. Wonderful, but they
are still fairly small percentages of the bonus packag
Congressman Moulton says Norfolk Southern's new
willingness to tie safety performance to cash awards
for its leadership is long overdue. I think it will
make a difference in safety. I think Norfolk Souther
is demonstrating some real leadership here and I hope
other major railroads follow their lead. Now,
Representative Moulton does off a note of caution
here saying that the changes should incentivize safe
changes, but he says ultimately it'll be up to the
railroad to see how much money they actually spend on
these improvements and other actions that they take
chance. Mark. It's evident your investigations here at
Sri News had a real impact in this case. What are your
sources saying about the future of carrying these
hazardous loads across America by train Well, it's a
great question and you know, it's important to note
that trains are noted to be a lot more safe than
carrying hazardous materials over the interstates, over
trucks. And so there's still a big push to carry these
materials on the railways. But the key thing here is
even though they're supposed to be safer. These new
incentives are really being welcomed by members of
Congress as something that should make the rails even
that much better, that much safer to hopefully prevent
the next East Palestine Chance, senior invest
correspondent, Mark Greenblatt Relentless is the word
for your process of reporting and in this case,
resulting in real change. Thank you, Mark. Nice job.