(The following story by Christopher Dinsmore appeared on The Virginian-Pilot website on March 18.)
NORFOLK, Va. — The top executive at Norfolk Southern Corp. saw his total compensation rise 7.5 percent in 2004 to $11.5 million, according to the company’s proxy statement filed Thursday with the Securities and Exchange Commission.
The Norfolk-based railroad also disclosed in the proxy that it will hold its annual meeting May 12 at The Roper Performing Arts Center on Granby Street in Norfolk.
The annual salary of David R. Goode, the chairman and chief executive officer, remained unchanged at $1 million, but his bonus jumped 19.6 percent to $2 million, according to the proxy statement.
Other benefits – including payments to his 401(k), life insurance and use of corporate aircraft – totaled $739,026, up from $653,012 in 2003.
He received restricted stock awards worth $3.57 million last year, up from $3.14 million in 2003. He also received $2.74 million worth of performance shares in 2004, up from $1.46 million the year before, under the company’s long-term incentive plan, which reflects performance over the past three years.
Goode also received 160,000 stock options with an estimated value of $1.48 million. As of the end of the year, he owns or controls 3.49 million shares of the railroad’s stock worth $130.4 million at Thursday’s closing price.
The gain in Goode’s compensation comes in what was a strong year for Norfolk Southern. The railroad saw its revenue surge 13 percent to $7.3 billion in 2004. Earnings soared 72.5 percent to $923 million, or $2.31 a share.
The railroad’s stock gained $12.54 a share over the course of the year, closing 2004 at $36.19 each, a 53 percent increase. It closed Thursday at $37.35, up 76 cents a share.
The proxy also disclosed that AXA Financial Inc., the railroad’s largest shareholder, cut its stake in Norfolk Southern to 31.0 million shares, or 7.8 percent of the outstanding stock, at the end of the year from 56.9 million shares a year earlier.
The proxy also disclosed compensation for Goode’s heir apparent, Charles W. “Wick” Moorman IV, who was appointed president of Norfolk Southern last fall. Goode intends to retire next January.
While Moorman was only president for about one quarter last year, his total compensation was $1.58 million in 2004, including stock options worth an estimated $277,800. That’s up from about $1 million, not including any stock options, the year before.
The other top three executives also saw their compensation grow:
— L.I. “Ike” Prillaman, vice chairman and chief marketing officer, $3.89 million in 2004, up from $3.25 million. – Stephen C. Tobias, vice chairman and chief operating officer, $4.0 million, up from $3.49 million.
— Henry C. Wolf, vice chairman and chief financial officer, $4.07 million, up from $3.54 million.
Four directors are up for re-election to the railroad’s board of directors: Moorman; Gerald L. Baliles, the former Virginia governor who is now a partner of Hunton & Williams in Richmond; Gene R. Carter, executive director and chief executive officer of the Association for Supervision and Curriculum Development; and retired Adm. J. Paul Reason, president and chief operating officer of Metro Machine Inc., a Norfolk-based ship repair company.
In addition to electing directors, shareholders also will be asked to approve amendments to two incentive plans and ratify KPMG LLC as auditor for the company’s financial statements.
Norfolk Southern also announced Thursday that its annual report is complete and will be mailed to shareholders. The report is also posted on its Web site, www.nscorp.com.
In his letter to shareholders, Goode praised the railroad’s employees for how they responded to and handled the unprecedented growth in rail traffic last year.
“We are at the threshold of a new growth-oriented, growth-driven business model for the railroad industry,” Goode wrote. “Norfolk Southern will be prepared and is determined to seize the opportunity.”