In Wake of Toxic Train Disaster, Norfolk Southern Shareholders Demand Greater Lobbying Transparency
Nearly 40% of Norfolk Southern Shares Cast in Favor of Lobbying Disclosure Proposal at Company Annual Meeting, Despite Opposition from Board of Directors
Washington, D.C. — At its Annual General Meeting last week, shareholders of railroad company Norfolk Southern voted in significant numbers to back a proposal calling for stronger transparency of the company’s lobbying spending on the federal and state level. The proposal also calls for stronger transparency of lobbying payments to trade associations and “dark money” groups that decline to disclose their donors or detail their lobbying activities.
“This strong vote by Norfolk Southern shareholders shows that investors realize how risky it is for big companies to hide some of their lobbying spending while pretending to be transparent,” said Jon Golinger, democracy advocate for Public Citizen. “Disasters and PR crises have revealed the reputational risks when companies say one thing publicly while lobbying for something different behind closed doors. That kind of misalignment between public positioning and lobbying can damage investor value.”
Official vote totals at the company meeting on May 9, 2024 show that 38.9% of Norfolk Southern voting shares were cast in support of Proposal 4 to require a new “Annual Report on Lobbying Activities, Policies, and Communications,” despite opposition from the Norfolk Southern Board of Directors. According to business research group The Conference Board, shareholder support of 30% or more in favor of a shareholder proposal indicates an “issue meriting board attention.”
The Norfolk Southern lobbying disclosure proposal requests that the company provide an annual report to shareholders disclosing its policies and procedures governing lobbying, payments used for direct or indirect lobbying as well as grassroots lobbying communications, membership in and payments to tax-exempt organizations that write and endorse model legislation, and the board and management’s decision-making process for making those lobbying payments.
The vote comes just over a year since the Norfolk Southern train derailment disaster in East Palestine, Ohio on February 3, 2023. A recent report by Public Citizen revealed that Norfolk Southern spent $2,340,000 lobbying the federal government in 2023 – up 30% from the $1,800,000 it spent the year before. This included money spent lobbying Congress on issues such as railway safety and railroad staffing requirements.
Meanwhile, a campaign led by Public Citizen and the Corporate Reform Coalition seeks to strengthen corporate lobbying disclosure by requiring all U.S. companies to inform investors of their spending on lobbyists. Last November, five U.S. Senators – Senators Sherrod Brown, Elizabeth Warren, John Fetterman, Jon Tester, and Tina Smith – sent a letter to the Securities Exchange Commission urging it “to use its existing authority to issue rules requiring disclosure of corporate lobbyist expenditures to shareholders.”