Summary
Norfolk Southern Corporation (NSC) filed an 8-K on November 23, 2005, primarily detailing changes to executive compensation and incentive plans, effective January 1, 2006. The most significant change reported is the adjustment of annual salaries for key named executive officers, including the President and CEO, Charles W. Moorman, whose salary will increase to $750,000. Other Vice Chairmen will receive a salary of $600,000 each. In addition to salary adjustments, the filing outlines modifications to the company's Long-Term Incentive Plan. Notably, the vesting period for stock options granted in 2005 has been reduced from three years to one year. This change is intended to lower the expense recognized for these options starting in fiscal year 2006. Furthermore, the performance criteria for bonuses under the Executive Management Incentive Plan and Management Incentive Plan for the 2006 incentive year have been set as pre-tax net income and operating ratio.
Key Highlights
- 1Revised annual salaries for key named executive officers, including CEO Charles W. Moorman, effective January 1, 2006.
- 2CEO Charles W. Moorman's annual salary to be $750,000.
- 3Vice Chairman salaries for L. I. Prillaman, Stephen C. Tobias, and Henry C. Wolf to be $600,000 each.
- 4Vesting period for stock options granted in 2005 under the Long-Term Incentive Plan reduced from three years to one year.
- 5The reduction in vesting period is intended to decrease stock option expense recognized from 2006 onwards.
- 6Performance criteria for bonuses in 2007 (for 2006 performance) under incentive plans will be pre-tax net income and operating ratio.