NORFOLK SOUTHERN CORPORATION | Lobbying Expenditures Disclosure at NORFOLK SOUTHERN CORPORATION

Status
38.89% votes in favour
AGM date
Previous AGM date
Proposal number
4
Resolution details
Company ticker
NSC
Lead filer
Individual
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Lobbying / political engagement
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
RESOLVED, the shareholders of Norfolk Southern request the preparation of a report, updated annually, disclosing:
1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
2. Payments by Norfolk Southern used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
3. Norfolk Southern’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.
4. Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above.
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Norfolk Southern is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Government and Nominating Committee and posted on Norfolk Southern’s website.
Supporting statement
SUPPORTING STATEMENT
Full disclosure of Norfolk Southern’s lobbying activities and expenditures is needed to assess whether its lobbying is consistent with its expressed goals and in shareholder interests. Norfolk Southern spent $41,250,000 on federal lobbying from 2010 – 2022. This does not include state lobbying, where Norfolk Southern also lobbies. Norfolk Southern’s lobbying in Ohio has come under scrutiny after the train accident in East Palestine.1
Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity.2 Norfolk Southern discloses nondeductible payments to trade associations and tax-exempt organizations “where the nondeductible payments exceeded both $10,000 and 10 percent of the tax-deductible amount that the Corporation paid to the organization in 2022.” For 2022, payments captured included $707,004 to the Association of American Railroads (AAR). Yet Norfolk Southern’s disclosure omits payments to major trade associations that lobby, like membership in the American Chemistry Council (ACC),3 and social welfare groups, such as serving on the board of GORail.
Norfolk Southern’s lack of disclosure presents reputational risk when its lobbying contradicts company public positions. For example, Norfolk Southern is committed to becoming the gold standard of safety in the industry, yet AAR has lobbied to be allowed to use automatic technology instead of human inspectors to inspect rail infrastructure and fought state laws to require two crew members on trains,4 and the ACC has lobbied to weaken the Railway Safety Act.5 And GoRail, which reportedly operates out of the same building as AAR and “exists to generate grassroots support – or the appearance of grassroots support – for the industry’s policy agenda,” has also opposed two crew staffing rules.6
Norfolk Southern should expand its lobbying disclosure.
1 https://ohiocapitaljournal.com/2023/03/02/will-norfolk-southerns-political-spending-help-shield-it-from-consequences/.
2 https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/.
3 https://www.americanchemistry.com/chemistry-in-america/responsible-care-driving-safety-industry-performance/responsible-care-award.
4 https://www.eenews.net/articles/rail-safety-plans-likely-to-hit-wall-of-industry-lobbying/.5 https://jacobin.com/2023/08/east-palestine-occidental-petroleum-lobbying-senate-regulations.
6 https://www.theguardian.com/us-news/2023/feb/27/ohio-train-east-palestine-norfolk-southern-pr-push.

Filed by John Chevedden

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