(The Virginian-Pilot posted the following article by Carolyn Shapiro on its website on March 18.)
NORFOLK, Va. — The chairman, chief executive officer and president of Norfolk Southern Corp. got a 55 percent raise in salary, bonuses and other cash compensation in 2002, a year that the railroad showed significant improvement in earnings.
David R. Goode earned $4.5 million last year, up from $2.9 million in 2001, according to the proxy statement the company filed Monday with the U.S. Securities and Exchange Commission. The proxy statement lists compensation for a corporation’s five highest-paid executives.
Goode’s total compensation included a $1.7 million payout from the railroad’s long-term incentive plan, which is based on Norfolk Southern’s financial performance over the past three years. His long-term incentive payments almost quadrupled from 2001.
Goode’s annual salary also grew 2 percent to $970,833 last year. His bonus award dropped almost 8 percent to $883,944. The bonus is based on the company’s annual performance.
“Some years, the measurements are more demanding than they are in other years,” Norfolk Southern spokesman Bob Fort said.
Other compensation for Goode included the company’s contribution to his 401(k) account and the $143,456 cost for his personal use of the company’s airplane.
In addition to his cash compensation, the Norfolk Southern CEO received stock options with a present value of $7.7 million. His actual gain from exercising these options will depend on the price of Norfolk Southern’s shares on the exercise date.
Performance incentives more than doubled for Norfolk Southern’s three vice chairmen, who each received a $267,293 payout under the long-term plan. L.I. “Ike” Prillaman, the company’s vice chairman and chief marketing officer, received the greatest salary increase of the top-paid executives — an 18 percent raise, bringing his annual salary to $481,250. With bonuses and other compensation, Prillaman’s total compensation jumped 56 percent to $1.4 million last year.
Stephen C. Tobias, vice chairman and chief operating officer, earned $1.6 million in total compensation, an increase of 36 percent. Salary, bonuses and other compensation for Henry C. Wolf, Norfolk Southern’s vice chairman and chief financial officer, rose 38 percent in 2002 to $1.6 million. Compensation packages for Tobias and Wolf included an annual salary of $545,833.
James A. Hixon, the railroad’s senior vice president of administration, took home $747,486 in total compensation, a raise of 48 percent from the year before, including a $292,500 annual salary.
The board’s Compensation and Nominating Committee determined the executives’ salaries based on surveys of U.S. corporations of comparable size and other U.S. railroads, the proxy statement said. Norfolk Southern is the nation’s fourth-largest railroad.
Goode owns 3.6 million shares of Norfolk Southern, including 3.1 million under option, almost 1 percent of the company’s 388.9 million shares outstanding.
Norfolk Southern’s largest shareholder, according to the proxy statement, is the giant French insurer AXA Group and its affiliates, which own 49.6 million shares, or 12.8 percent of the common stock outstanding.
Norfolk Southern’s shares closed Monday at $18.79, up 38 cents for the day.
The proxy statement also includes a shareholder proposal to scrap the existing classification of Norfolk Southern’s directors into three groups that come up for election every three years.
(Staff writer Tom Shean and Bloomberg News contributed to this report.)