Claude Elkins
Executive Vice President & Chief Commercial Officer at NSC
Executive
About Claude Elkins
Claude E. Elkins, Jr. (age 59) is Norfolk Southern’s Executive Vice President & Chief Marketing Officer, serving in this role since December 1, 2021; previously he was Vice President, Industrial Products from April 1, 2018 to December 1, 2021 . Company performance in 2024 included railway operating revenues of $12.1B, operating ratio of 66.4% (65.8% adjusted), and diluted EPS of $11.57; net income was $2.62B . Pay-versus-performance disclosures show Norfolk Southern’s after-tax ROAIC of 11.5% and TSR value of $134 for an initial $100 invested on December 31, 2019, as of year-end 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Norfolk Southern | EVP & Chief Marketing Officer | Dec 1, 2021 – Present | Commercial leadership over pricing, service and growth priorities |
| Norfolk Southern | VP, Industrial Products | Apr 1, 2018 – Dec 1, 2021 | Led industrial segment; aligned marketing with operational velocity initiatives |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No public external directorships or roles disclosed in filings |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 600,000 | 600,000 | 600,000 |
| Target Annual Incentive Opportunity ($) | — | — | 810,000 |
| Actual Annual Incentive Paid ($) | 400,019 | 0 | 749,250 |
Notes:
- 2024 corporate performance factor was 92.5% of target, driving the 2024 payout; the Committee included East Palestine impacts in calculating outcomes, reducing annual awards by 17% versus prior methodology .
Performance Compensation
2024 Annual Incentive Plan – Corporate Scorecard
| Metric | Weighting | Threshold | Target | Maximum | Achievement (% of Target) |
|---|---|---|---|---|---|
| Operating Ratio | 30% | — | — | — | 150.0% |
| Operating Income | 25% | — | — | — | 74.4% |
| Annual Revenue | 15% | — | — | — | 0.0% |
| Merchandise On-Time Delivery | 10% | — | — | — | 64.1% |
| Intermodal Composite | 10% | — | — | — | 150.0% |
| FRA Injury Rate | 5% | — | — | — | 0.0% |
| FRA Train Accident Rate | 5% | — | — | — | 149.0% |
| Total Corporate Performance Factor | — | — | 100% | — | 92.5% |
Long-Term Incentives and 2024 Grants
| Grant Type | Grant/Action Date | Units/Options | Terms | Grant-Date Fair Value ($) |
|---|---|---|---|---|
| PSUs (2024 cycle) | 03/01/2024 | Target 3,850 | 3-year performance; 2025 design emphasizes 60% ROAIC, 40% relative TSR (no modifiers) | 1,001,270 |
| RSUs | 01/30/2024 | 2,110 | Time-based; vest ratably over four years | 498,973 |
| Stock Options | 01/30/2024 | 6,280; Exercise $236.85 | Vest ratably over four years; 10-year term | 500,202 |
PSU Earnout (2012–2024 Cycle settled early 2025)
| PSU Cycle | Metric/Modifier | Result | Final Payout |
|---|---|---|---|
| 2022–2024 | 3-year Avg ROAIC | 12.3% → 50% of target | 37.5% after 0.75x TSR modifier |
| Units (Elkins) | Granted vs Earned | Granted 2,900 vs Earned 1,088 | Settled in shares, less withholding |
Equity Ownership & Alignment
| Ownership/Equity | Detail |
|---|---|
| Beneficial Ownership | 17,353 shares as of March 3, 2025, including 128 shares in Thrift & Investment Plan and 15,560 shares subject to stock options exercisable within 60 days |
| RSUs (Unvested) | 4,949 units; market value $1,161,530 |
| PSUs (Unearned) | 8,652 units; payout value $2,030,624 |
| Options – Exercisable | 7,180 (ex. price $298.08; exp. 1/26/2032) and 1,610 (ex. price $241.18; exp. 1/25/2033) |
| Options – Unexercisable | 7,180 (ex. $298.08, exp. 1/26/2032); 3,050 (ex. $270.98, exp. 1/26/2032); 4,830 (ex. $241.18, exp. 1/25/2033); 6,280 (ex. $236.85, exp. 1/29/2034) |
| Ownership Guidelines | EVPs must hold stock equal to 3x salary; 100% of net shares must be held until requirement met; all officers meet or are expected to meet within five years |
| Pledging/Hedging | Prohibited for executive officers; all executive officers and directors compliant |
Employment Terms
Executive Severance Plan
- Severance: Lump-sum equal to 2x salary for eligible executives upon involuntary termination (other than for Cause) or resignation for Good Reason; plus prorated annual incentive (if not retirement-eligible) and cash settlement of unvested RSUs/options and prorated PSUs if not retirement-eligible; $30,000 outplacement and $36,000 healthcare coverage .
- Non-compete: LTIP awards subject to forfeiture if “engages in competing employment” in North America after termination; additional non-compete restrictions apply under CIC agreements .
Change-in-Control (CIC) Agreements
- Double-trigger: Benefits only if a CIC occurs and termination for reasons other than Cause or resignation for Good Reason within two years thereafter .
- Cash multiple: 2.99x sum of base salary plus target annual incentive .
- Good Reason: Material reduction in salary/bonus/perquisites; substantial diminution in duties; relocation >50 miles; failure to assume obligations, etc. .
- Equity treatment: RSUs do not accelerate on CIC; forfeited upon termination unless retirement, disability, or death; Committee can waive RSU restrictions; PSUs/Options treated per retirement provisions or cash equivalent if not retirement-eligible .
Retention/Transaction Bonus (Merger-related)
- One-time cash retention award of $2,000,000 granted Sept 23, 2025 under the transaction bonus program in connection with the announced Union Pacific–Norfolk Southern merger .
- Vesting: 25% on April 28, 2026; 25% on January 28, 2027; 50% at Closing; immediate vesting of next tranche if terminated without Cause pre-Closing or upon qualifying termination post-Closing under CIC agreement .
Clawbacks
- Mandatory NYSE-compliant clawback for restatements (3-year lookback) and supplemental clawback for detrimental conduct (gross negligence, fraud, intentional misconduct, policy violations causing reputational/safety failures), covering time- and performance-based incentives .
Performance & Track Record
| Metric | 2024 |
|---|---|
| Railway Operating Revenues ($MM) | 12,123 |
| Operating Ratio (%) | 66.4 (65.8 adjusted) |
| Net Income ($MM) | 2,622 |
| Diluted EPS ($) | 11.57 |
| Intermodal Units (000s) | 4,108 |
| Safety Highlights | FRA-reportable mainline accident rate reduced by >40% to industry-leading level |
The Compensation Committee increased emphasis on operating efficiency (OR) and aligned pay outcomes with shareholder experience by including East Palestine impacts in 2024 incentive calculations; 2022–2024 PSUs paid at 37.5% of target after ROAIC and TSR results .
Compensation Structure Analysis
- Mix and risk: 2024 target pay for non-CEO NEOs was ~82% at-risk/performance-based, with standardized PSU weighting increased to 60% for 2025 to emphasize long-term value creation via ROAIC and relative TSR .
- Shift away from modifiers: 2025 PSU design eliminates award modifiers, making TSR a standalone metric (40%) with above-median performance required for target payout .
- Governance safeguards: No option repricing; robust clawbacks; anti-hedging/pledging; double-trigger CIC; no excise tax gross-ups; independent consultant FW Cook engaged after say-on-pay feedback .
Risk Indicators & Red Flags
- Retention bonus (cash): Creates strong retention incentive through Closing; partial acceleration upon certain terminations mitigates cliff risk .
- Anti-pledging/hedging: Policy limits misalignment risk; executives compliant .
- Say-on-pay responsiveness: Committee integrated shareholder feedback, adding East Palestine impacts to outcomes and simplifying plan metrics .
Investment Implications
- Alignment: Strong ownership requirements (3x salary for EVPs) and retention of net shares support alignment; anti-pledging/hedging reduces misalignment risk .
- Performance pay linkage: Greater weighting on OR (annual) and standardized PSU emphasis on ROAIC/TSR should tie Elkins’ compensation more tightly to margin improvement and long-term shareholder returns .
- Event risk: Merger-related retention bonus defers 50% to Closing, indicating lower near-term voluntary departure risk; equity treatment under CIC reduces windfall risk via double-trigger mechanics .