NEW YORK, Sept 11 (Reuters) - Norfolk Southern ( NSC )

on Wednesday fired its chief executive officer, Alan Shaw, and

promoted its chief financial officer to run the railroad after

an internal probe into allegations Shaw had violated company

ethics policies.

The company tapped Mark George as president and chief

executive, ending days of frenzied speculation about the future

of Shaw since the company acknowledged on Sunday that it was

probing allegations

Shaw had an inappropriate relationship with a direct

report.

"Shaw's departure is unrelated to the company's

performance, financial reporting and results of operations," the

company said in a statement, adding that Shaw was terminated for

cause.

The company also said it terminated Nabanita Nag,

Norfolk Southern's ( NSC ) chief legal officer, with whom Shaw had a

consensual relationship.

Reuters earlier reported that George, who had been in

the running for the top job when Shaw was appointed in 2022, was

a candidate to replace him.

Reuters also reported earlier that executives and lawyers

were discussing terms of a potential exit package for Shaw,

including severance, according to two sources.

Shaw had been with the company for decades and led the

company during a disastrous 2023 derailment in East Palestine,

Ohio that is expected to cost the company more than $1 billion

to settle claims.

The investigation into Shaw's conduct comes months

after the CEO survived a bitter proxy contest with activist

hedge fund Ancora Holdings that saw investors vote in three new

directors to the company's 13-member board.

George will join the board, the company said.

Claude Mongeau, executive chair of the board who has been a

director since 2019, praised George for having financial

experience and operational expertise.

"He embodies our corporate values and is a champion of

our safety culture. In close partnership with our accomplished

chief operating officer, John Orr, they will continue to improve

Norfolk Southern's ( NSC ) operating performance," Mongeau said in the

statement.