$53 billion Norfolk Southern creates $1 million fund for train derailment victims
Norfolk Southern Corp. faces criticism for the amount of financial assistance it has given to East Palestine, Ohio, after the train derailment that spewed toxic chemicals and forced residents to leave their homes for several days.
While locals seek answers as to whether the air is safe to breathe, the railroad company has announced a $1 million fund for the affected community. Norfolk Southern NSC,
has also distributed more than $1.7 million in direct financial assistance to “more than 1,000 residents” and a “number of businesses” and donated $25,000 to the Red Cross, the company said.
The state’s Republican Gov. Mike DeWine said Norfolk Southern’s financial gestures weren’t enough.
“The governor expects Norfolk Southern to heal residents of eastern Palestine,” a DeWine spokesman said. “He does not see what has been done so far as fulfilling that obligation. We intend to keep the company’s feet in the fire to continue to clean up the site and bring citizens back to health.”
Some observers have pointed out that Norfolk Southern’s value, which was $53 billion as of Friday, distant solar eclipses Donations made by the company since the February 3 disaster. CNN host Jake Tapper on Wednesday written down the discrepancy between Norfolk Southern’s $1.3 billion in quarterly revenue and the $1 million the company provides to local families.
Norfolk Southern did not immediately respond to a request for comment regarding criticism of its donations.
The company said the $1 million community fund for the East Palestine community “will complement other efforts to support residents, businesses and first responders,” which include spending $220,000 on air packages for the East Palestine Fire Department heard, providing “more than 100”. air cleaners for residents’ homes and paying for air monitoring at local schools.
Norfolk Southern spent $4.23 billion on share buybacks in 2022
other critics have circled on Norfolk Southern’s recent share buybacks.
The company launched a new $15 billion stock repurchase program with no expiration date in August 2022. The company said it spent $4.23 billion on share buybacks in 2022. The $1 million earmarked for the community fund represents 0.02% of the money Norfolk Southern spent on share buybacks in 2022.
Companies buy back their own stock to reduce the number of shares outstanding, which in turn can increase earnings per share and increase the stock price. This ultimately benefits the company’s executives and shareholders.
Buybacks have their critics, including President Joe Biden, who in this month’s State of the Union address took aim at the practice and proposed quadrupling the tax on company stock buybacks.
“Stock buybacks allow companies to direct tax-deferred payouts to wealthy and overseas investors instead of paying dividends that shareholders have to pay taxes on,” the White House said Feb. 6. “Furthermore, a number of experts have argued that CEOs – who are primarily compensated in shares – use buybacks to enrich themselves at the expense of long-term company growth.”
Some critics, including former Secretary of Labor Robert Reich, have argued that Norfolk Southern could have spent the money it used on share buybacks on safety improvements that could have prevented the derailment.
“A down payment for our commitment to rebuilding”
In addition to establishing the community fund, Norfolk Southern is making cash payments to residents to help cover expenses they have incurred evacuating their homes.
The railway company initially said it would reimburse people within a mile of the evacuation zone, but expanded the eligible area to include the entire postcode of East Palestine after elected officials included Senator JD Vance And Rep. Bill Johnson, both Ohio Republicans, asked Norfolk Southern to include more households. The companys website directs residents seeking reimbursement to provide receipts for evacuation-related costs.
A local attorney has To ponder that the $1,000 checks issued by Norfolk Southern could limit potential future payments from the company, but a railroad spokesman said that was not the case. Vance and Ohio’s other senator, Democrat Sherrod Brown, have both said the reimbursement money shouldn’t absolve the railroad of any liability for the disaster. Norfolk Southern seemed to agree on twitterand wrote: “Contrary to rumours, there are no hidden legal risks in accepting these funds.”
Brown said hundreds of eastern Palestinian families were “rightly concerned about long-term health risks from the Norfolk Southern train derailment.”
“No American family should be forced to face the horror of fleeing their homeland because of hazardous material spills or fires in their community,” he added. “We will work to ensure Norfolk Southern is held accountable and pays for the cleanup and continued surveillance.”
Alan Shaw, CEO of Norfolk Southern, in an open letter to the East Palestinian community, called the $1 million fund a “down payment on our commitment to help rebuild.” He added: “I know there are still many unanswered questions. i know you are tired I know you’re worried We do not leave you hanging.”
Norfolk Southern share prices have fallen since the derailment; Shares closed at $252.12 on Feb. 3 and $228.15 on Friday. Norfolk Southern shares are down 16.6% over the past 12 months, compared to a 1.47% decline in the Dow Jones Industrial Average DJIA.
and a 6.62% decline for the S&P 500 Index SPX,
Tomi Kilgore contributed to this story.
https://www.marketwatch.com/story/norfolk-southern-which-spent-4-billion-on-stock-buybacks-last-year-creates-1-million-fund-for-ohio-train-derailment-victims-49706ac8?siteid=yhoof2&yptr=yahoo $53 billion Norfolk Southern creates $1 million fund for train derailment victims
