James A. Squires

James A. Squires
Born	Hollis, New Hampshire, U.S.
Nationality	American
Education	Amherst College (BA, 1983) University of Chicago Law School (JD, 1992)
Occupation	Railroad executive, lawyer
Company	Norfolk Southern
Title	Chairman and Chief Executive Officer, Norfolk Southern (2015 to 2022)
Spouse	Karen Jones Squires
Children	2

James A. Squires, known as Jim Squires, is an American former railroad executive who was chief executive officer of Norfolk Southern Corporation from June 1, 2015, to May 1, 2022, and chairman of its board from October 1, 2015, to May 1, 2022. He was also the company's president from June 1, 2013, until December 1, 2021.

Squires studied ancient Greek at Amherst College, spent a year as a fellow at Doshisha University in Kyoto, served in the United States Army from 1985 to 1989 and earned a law degree from the University of Chicago Law School before joining the railroad's law department in 1992. He moved from the legal department into finance in 2006 and was the railroad's chief financial officer from 2007 to 2012.

Within six months of becoming chief executive, Squires led the company's defence against an unsolicited takeover proposal from Canadian Pacific Railway, which the Norfolk Southern board rejected and which Canadian Pacific withdrew in April 2016. His tenure was also marked by a steep fall in the railroad's coal business, a cost-reduction plan announced in 2015, the adoption of precision scheduled railroading under a three-year plan launched in 2019, the relocation of the corporate headquarters from Norfolk, Virginia, to Atlanta, and the COVID-19 pandemic.

Norfolk Southern reported a record operating ratio of 60.1 percent for 2021, the last full year of his tenure, compared with 72.6 percent in 2015, his first year as chief executive. After retiring as chairman and chief executive, Squires remained on the Norfolk Southern board as a director until the company's annual meeting on May 11, 2023, when he did not stand for re-election.

Early life and education

Squires is a native of Hollis, New Hampshire. He has said that his father was a train enthusiast who kept model trains and who, as a boy growing up in a small New Hampshire town, would go to watch steam trains.

He attended Amherst College, where he received a Bachelor of Arts in ancient Greek in 1983. In a 2021 interview he said, "I set out to be a classics professor," adding that he had also become interested in Japanese language and culture and moved to Japan after college. After graduating he spent a year as the Amherst-Doshisha Fellow at Doshisha University in Kyoto, Japan.

Squires then enlisted in the United States Army, in which he served from 1985 to 1989. Progressive Railroading reported that he served as a Japanese language expert. According to Squires, he had expected to be posted to the American embassy in Japan but was instead assigned to Fort Bragg, North Carolina, with a psychological operations battalion organised around an Asian theatre of operations. He met his future wife there.

After leaving the army, Squires studied law at the University of Chicago Law School, receiving a Juris Doctor in 1992. He later served on the law school's Visiting Committee. He has said he went to law school intending to work internationally and to use the Japanese he had studied for about a decade, and that he came close to accepting a position with a Japanese law firm before learning of the Norfolk Southern law department through "a very random contact in the placement office of the law school".

Career

Norfolk Southern law department (1992 to 2006)

Squires spent a summer in Norfolk, Virginia, before he and his wife decided to make the move permanent, and he joined the company in 1992. Progressive Railroading described his first position as an intern in the legal department. He held several staff positions in the law department, rising to senior general counsel, and was named vice president law on December 1, 2003. He became senior vice president law on October 1, 2004.

Finance and chief financial officer (2006 to 2012)

On April 1, 2006, Squires moved from the law department to the finance side of the company as senior vice president financial planning. He became executive vice president finance on April 1, 2007, and on July 1, 2007, he also took the title of chief financial officer, succeeding Henry Wolf, who retired as vice chairman and chief financial officer. The company's 2009 proxy statement noted that his base salary and total cash compensation were below the company's targeted range for his position because his "time in position is relatively short."

Squires was chief financial officer through the 2008 financial crisis and the recession that followed. Virginia Business magazine gave him its CFO Award for publicly traded companies in Virginia in 2011.

Executive vice president administration and president (2012 to 2015)

On August 1, 2012, Squires and John P. Rathbone exchanged roles: Rathbone, who had been executive vice president administration, became executive vice president finance and chief financial officer, and Squires became executive vice president administration.

In May 2013 the company announced that Squires would become president on June 1, 2013, taking over that title from Charles W. "Wick" Moorman, who remained chairman and chief executive. As president, Squires was responsible for the corporation's administration, finance, law and corporate relations divisions, as well as its planning and information technology divisions. Moorman called him "a forward-thinking railroader and a well-tested leader". The board's compensation committee, finding no directly comparable position at peer companies, set his salary between the levels of the chief executive and the executive vice presidents and raised his maximum annual bonus opportunity from 145 percent to 165 percent of salary.

On January 21, 2014, the board increased its size from 12 to 14 members and elected Squires and Amy E. Miles as directors. The 2014 proxy statement said he was nominated "because of his position as the President of the Corporation" and that, as an executive, he was not an independent director.

Chief executive officer and chairman (2015 to 2022)

On March 2, 2015, the board announced that Squires would succeed Moorman as chief executive officer on June 1, 2015, as part of a planned succession process. Squires, then 53, kept the title of president, with all major divisions reporting to him, while Moorman stayed on as executive chairman. "Leading NS is an incredible honor," Squires said in the announcement, pledging with the company's 30,000 employees to "exceed the expectations of our shareholders and the people and businesses who depend on us." The 2015 proxy statement said the board had separated the chief executive and chairman roles for a period so that Squires could "focus on managing the business of the corporation" while Moorman provided continuity.

In September 2015 the company announced that Moorman would step down as executive chairman on October 1, 2015, and that Squires would become chairman, adding the title to those of president and chief executive. Moorman served as senior advisor to Squires until the end of 2015. At the same time Mark D. Manion, the executive vice president and chief operating officer, announced his retirement, and Michael J. Wheeler was named to succeed him. Squires said at the time that he spoke for "the 30,000-strong Norfolk Southern team in expressing our gratitude for Wick's leadership."

One of the first public issues of his tenure was the federal deadline of December 31, 2015, for installing positive train control. The railroad issued notices that it would stop carrying poisonous-inhalation-hazard commodities and stop hosting passenger and commuter trains if the deadline was not extended. After Congress extended the deadline to December 31, 2018, in the Surface Transportation Extension Act of 2015, the company rescinded the notices.

Squires's first years as chief executive were dominated by the Canadian Pacific takeover attempt and by a cost-reduction plan that the company presented as its alternative (see below). Coal, historically a central commodity for the railroad, declined sharply over the same period. According to Progressive Railroading, coal fell from 23 percent of revenue in 2013 to 15 percent in 2016, and annual coal revenue came in about $1 billion below projections in 2016. Squires later said that "between 2014 and 2021, our coal volumes were cut in half," which required the company "to figure out some way to adjust our strategy to account for that loss." Under his leadership the company sought to replace the lost revenue with intermodal and merchandise traffic. Intermodal's average share of revenue rose to 26 percent in 2017 to 2021, from 22 percent in 2012 to 2016, while coal's share fell to 14 percent from 20 percent. "We are a more consumer products-oriented railroad now," Squires said in 2022. "Intermodal was more of a side business when I started."

In 2018 the company came under analyst pressure to adopt precision scheduled railroading, an operating model then in use at rival CSX. On the company's third-quarter 2018 earnings call, Squires said, "Yes, we will be implementing precision railroading principles where they benefit customers and shareholders," and promised details at an investor conference in February 2019. At that conference, on February 11, 2019, the company presented a strategic plan targeting an operating ratio of 60 percent by 2021. Squires said the plan was focused on "five key principles: serving our customers, managing our assets, controlling our costs, working safely, and developing our people."

In December 2018 the company announced that it would move its headquarters from Norfolk to Atlanta (see below). The company opened the new Midtown Atlanta headquarters in November 2021.

During the COVID-19 pandemic, Squires said in January 2021 that the company was "continuing to make the maximum effort to protect our front-line employees" and that he expected a recovery in the second half of that year. In 2020 the company took a $385 million non-cash charge to retire locomotives and a $99 million impairment on an equity-method investment. In January 2022 Squires described the fourth quarter of 2021 as "the successful completion of the ambitious three-year strategic plan we launched in 2019."

Succession and retirement (2021 to 2023)

On December 2, 2021, the company announced that Squires would retire on May 1, 2022, and that Alan H. Shaw, executive vice president and chief marketing officer, would succeed him as chief executive. Shaw became president immediately, and the executive leadership team began reporting to him. "This is the right moment for a leadership transition," Squires said. "The company is in rock-solid position, I've accomplished what I set out to achieve, and our board of directors has identified the right leader in Alan Shaw."

In January 2022 the board decided to separate the roles of chief executive and chair, and named independent director Amy E. Miles, a former chief executive of Regal Entertainment Group, as non-executive chair from May 1, 2022. The board said Squires would remain a director after his retirement and stand for re-election at the annual meeting on May 12, 2022. Shareholders re-elected him with 171,424,430 votes for and 3,840,622 against.

Five days before leaving office, Squires told Progressive Railroading that his retirement would be "a gradual process," and that nonprofit volunteer work would be "the No. 1 focus after I retire." On January 24, 2023, he told the board that he would not stand for re-election; the company said the decision was "not due to any disagreement" with it. The 2023 proxy statement said he had "remained on the Board for transitional purposes" and that his term would end at the annual meeting on May 11, 2023.

Leadership and management style

Squires came to the chief executive's job from law and finance rather than from railroad operations, and he described his career as "characterized by a variety of unexpected twists and turns." He said in 2022 that he had learned a great deal on the job, including from chairing the Association of American Railroads and Virginia's Transportation Accountability Commission, and that one of his challenges was balancing the demands on his time: "as a chairman, you are a member of a board, and you lead 13 other people with different backgrounds and ideas." His advice to his successor was to spend time in the field. "One time in my career, I was told to go out and learn everything about communications and signals," he said. "I learned how a signal is built, that's important." He and Shaw held town hall meetings with employees during the transition.

His public statements on cost cutting consistently tied efficiency to service. Announcing job cuts in January 2016, he told analysts, "We're not going to sacrifice our service, but everything else is on the table, we'll cut wherever we need to cut, short of hurting service." Speaking about precision scheduled railroading in 2021, he said, "Cost control is important, but this is about operational excellence, which includes an insistence on safety and customer service," and called the company's approach "the 'no surprises' version of PSR," under which customers would be told of operational changes in advance.

Squires said the Canadian Pacific bid changed how he thought about the company. "It was a wake-up call for our board and for me," he said. "From that time on, I felt that the company needed to change ways." He linked the later headquarters move to three aims: keeping the company independent, shifting strategy to replace lost coal revenue, and building "a more diverse management team." On his record he said, "We didn't achieve [all these] things just because of me, it was a group effort."

Major deals and strategic decisions

Canadian Pacific takeover attempt (2015 to 2016)

On November 17, 2015, Norfolk Southern confirmed that it had received an unsolicited, non-binding proposal from Canadian Pacific Railway to acquire the company for $46.72 in cash plus 0.348 Canadian Pacific shares per Norfolk Southern share. The company described this as a premium of less than 10 percent and noted that any consolidation among Class I railroads would face significant regulatory hurdles.

On December 4, 2015, the board unanimously rejected the proposal as "grossly inadequate." Squires said there was "a high probability that, after years of disruption and expense, the proposed combination would be rejected by the Surface Transportation Board," and argued that "Canadian Pacific's short-term, cut-to-the-bone strategy could cause Norfolk Southern to lose substantial revenues from our service-sensitive customer base." Days later the company published a white paper by two former Surface Transportation Board chairmen, Francis Mulvey and Charles Nottingham, who concluded that the board would be unlikely to approve either Canadian Pacific's proposed voting trust or the merger. By late January 2016 the board had rejected three Canadian Pacific offers, and Squires asked analysts on the company's earnings call to confine their questions to results and the strategic plan. "Our focus is on execution of the plan," he said afterwards.

According to Progressive Railroading, Squires worked with the company's leadership to persuade the antitrust division of the United States Department of Justice to write to the Surface Transportation Board urging it to preserve its ability to review the competitive effects of the proposed merger. Canadian Pacific dropped the bid shortly afterwards. On April 11, 2016, the company issued a statement on Canadian Pacific's withdrawal of the proposal and of a related shareholder resolution. Its advisers in the defence had included Morgan Stanley, Bank of America Merrill Lynch, and the law firms Skadden, Arps, Slate, Meagher & Flom; Hunton & Williams; and Morrison & Foerster. "I'm proud we were able to fend off the hostile takeover," Squires said in 2022. He later described the episode as "about a five-month battle for control of the company," saying that "ultimately, the regulators stepped in and suggested that they would not approve the merger as proposed."

2015 strategic plan and job reductions

Alongside the rejection of the Canadian Pacific proposal, the company announced a strategic plan that it said came from a six-month review of its business model led by Squires with the board and management. The plan targeted an operating ratio below 70 percent in 2016 and below 65 percent by 2020, and annual productivity savings of more than $650 million by 2020, starting at $130 million in 2016.

Details released on January 27, 2016, included reducing headcount by 2,000 employees by 2020, halving overtime from 2015 levels, consolidating operating regions from three to two, halting or reducing work at several hump and secondary yards, and disposing of or downgrading 1,500 miles of secondary lines by 2020, including 1,000 miles in 2016. Reduced compensation and benefits costs were expected to account for $420 million of the annual savings. The plan also called for cutting the active locomotive fleet by 300 units in 2016 and another 100 by 2020. Squires told analysts that 1,200 of the job reductions would come in 2016, through attrition and furloughs, and that further cuts were possible depending on economic conditions. In 2015 the company had also restructured its Triple Crown Services subsidiary and closed its corporate office in Roanoke, Virginia, which together reduced 2015 net income by $58 million.

Precision scheduled railroading and the 2019 plan

The three-year plan presented in February 2019 targeted an improvement of at least 100 basis points on the 2018 operating ratio of 65.4 percent in 2019, an operating ratio of 60 percent by 2021, compound annual revenue growth of 5 percent through 2021, capital spending of 16 percent to 18 percent of revenue, and a dividend payout ratio of 33 percent with continued share repurchases. Before the plan was published, Squires said labour productivity would be "a key component of overall productivity."

The 2022 proxy statement said that over the three years of the plan the company grew earnings per share by 27 percent, reduced its operating ratio by 530 basis points and returned nearly $10 billion to shareholders through buybacks and dividends, "albeit with a very different formula than originally anticipated given the volume headwinds." Before leaving, Squires also set in motion a successor operating plan, TOP|SPG, focused on service, productivity and growth, which was scheduled to begin rolling out in mid-2022.

Headquarters relocation to Atlanta (2018 to 2021)

Norfolk Southern was formed in 1982 with its headquarters in Norfolk, while its operations centre and information technology division were in Atlanta. In October 2018, in a video to employees that was reported by The Virginian-Pilot, Squires said the company was "considering the consolidation of our Norfolk headquarters into Atlanta" and apologised for the uncertainty this had caused. "We will be better as a team if we are together in one place," he said. "I've believed that for a long time."

The company made the move official in December 2018, after the Atlanta City Council approved the sale of its property in the city's Gulch development to CIM Group. Squires told the Atlanta Business Chronicle that about 100 employees would move to temporary offices in 2019 and 400 more in 2021, and he cited the large number of flights at Atlanta's airport as a key factor. Ground was broken in March 2019. Squires cut the ribbon on the 750,000-square-foot headquarters on November 10, 2021. The building at 650 West Peachtree Street, near Georgia Tech, was intended in part to help the company compete with technology firms for staff.

Squires said in 2021 that the seeds of the move had been planted by the Canadian Pacific bid. "It was partly to ensure that we remained in control of the company and did not face another hostile takeover situation," he said, "partly because we needed to pivot to a different business strategy to grow our top line and replace the loss of coal. And third, because we knew we needed to have a more diverse management team. All three of those things ultimately led us to Atlanta."

Technology

Late in his tenure Squires emphasised automated inspection technology. The railroad was installing Machine Vision portals as part of a plan for 16 automated inspection corridors covering 90 percent of its network, intended to detect defects in locomotives, rail cars and track before they caused derailments. "We are investing in things that should pay off in a couple of years," he said in April 2022.

Financial and market performance

The company's railway operating revenues were $11.6 billion in 2014, the year before Squires became chief executive, and $10.5 billion in 2015. In 2021 revenues were $11.1 billion, net income was $3.0 billion, diluted earnings per share were $12.11, and income from railway operations was a record $4.45 billion. The operating ratio, the share of revenue consumed by operating expenses, rose from 69.2 percent in 2014 to 72.6 percent in 2015, then fell to 65.4 percent in 2018 and a record 60.1 percent in 2021. Progressive Railroading credited Squires with doubling the company's market capitalisation and improving its operating ratio by 1,200 basis points during his tenure. In announcing his retirement, lead independent director Steven F. Leer said Squires had "increased shareholder value by more than $30 billion." The 2022 proxy statement reported a total shareholder return of 110 percent over the 2019 to 2021 plan period.

The workforce shrank substantially. The railroad averaged 30,456 employees in 2015, had 27,453 at the end of the third quarter of 2018, and averaged 18,500 in 2021, ending that year with 18,100. In 2021 the company returned about $4.4 billion to shareholders, including roughly $3.4 billion in share repurchases and more than $1 billion in dividends.

Service suffered at the end of his tenure. In the first quarter of 2022 systemwide train speed averaged 18.2 miles per hour and terminal dwell 26.7 hours, compared with 20.5 miles per hour and 24.4 hours a year earlier. Squires called poor service to many shippers his main regret: "We're not serving customers as well as we should be today, as everyone else is experiencing in the industry."

Compensation

The company's proxy statements reported the following total compensation for Squires:

Year	Role	Reported total compensation
2014	President	$5,930,829
2015	President and CEO (chairman from October)	$7,989,565
2016	Chairman, president and CEO	$8,425,074
2017	Chairman, president and CEO	$11,937,137
2018	Chairman, president and CEO	$14,271,985
2019	Chairman, president and CEO	$16,636,674
2020	Chairman, president and CEO	$14,125,279
2021	Chairman and CEO	$14,016,942
2022	Chairman and CEO until May 1	$9,615,456

Sources: 2017, 2020 and 2023 proxy statements.

For 2021 the company reported a ratio of 140 to 1 between his annual compensation and that of its median employee. For the part of 2022 before his retirement, the board kept his salary, bonus opportunity and long-term award at 2021 levels. He was paid salary through his retirement date and a prorated 2022 bonus, and he forfeited part of each long-term stock award.

Board memberships and outside roles

• Norfolk Southern Corporation: director from January 21, 2014, to May 11, 2023; chairman from October 1, 2015, to May 1, 2022.
• Association of American Railroads: chair of the board of directors. He held the post in September 2018, when he announced Ian Jefferies as the association's next president and chief executive.
• United States Chamber of Commerce: board member.
• Virginia Transportation Accountability Commission: chairman, appointed by Governor Tim Kaine. The commission reported to the governor and the General Assembly on measuring and improving the performance of Virginia's transportation systems and agencies.
• Sentara Healthcare: former trustee.
• University of Chicago Law School: member of the Visiting Committee.
• Atlanta Committee for Progress and Piedmont Park Conservancy: board member, as of November 2021.
• Hampton Roads Community Foundation: board member. In April 2022 he said he planned to continue serving on this board and the Atlanta Committee for Progress after retiring.

Controversies

The Canadian Pacific contest was openly adversarial. Norfolk Southern's public statements, issued under Squires's leadership, called the proposal "low-premium, non-binding and highly conditional" and "grossly inadequate," and Squires described Canadian Pacific's operating approach as a "short-term, cut-to-the-bone strategy."

The 2,000 job cuts announced in January 2016 came as Norfolk Southern reported a 29 percent fall in fourth-quarter profit and a 20 percent fall in annual profit, and while Canadian Pacific's bid was still open. By the time Squires retired, crew shortages and supply chain problems had slowed service to shippers, which he acknowledged in his last interview as chief executive.

In Atlanta, the company drew local opposition in 2021. In May of that year Norfolk Southern abandoned plans for a rail transfer facility on the former Chattahoochee Brick Company site after opposition from the City of Atlanta, environmental groups and nearby neighbourhoods. The Metropolitan Atlanta Rapid Transit Authority (MARTA) also said it might have to give up plans for commuter rail through Clayton County because Norfolk Southern was unwilling to permit passenger trains on its corridor. Squires responded that the company hosted passenger trains elsewhere and was "open to such partnerships" where there was "adequate provision for future capacity."

Personal life

Squires met his wife, Karen Jones Squires, while serving in the army at Fort Bragg, where she worked in civilian intelligence. In 2021 he said they had been married for 34 years. They have two daughters, Eleanor and Maggie, who were in their late twenties in 2022. After the headquarters move the couple lived in a Midtown Atlanta high-rise within walking distance of the new building; Squires described it as "a great walkable lifestyle." On retiring he said he planned to travel with his family, which they had postponed during the pandemic.

Philanthropy

Progressive Railroading reported in 2022 that Squires and his wife had donated millions of dollars to various organisations over the years. In Norfolk, they supported the Elizabeth River Project, ForKids Inc., Old Dominion University and the ACCESS College Foundation, among others. In Atlanta they set up a donor-advised fund with the Community Foundation for Greater Atlanta, through which, as of November 2021, they were funding smaller nonprofits, in particular those led by Black women.

Recognition

• 2011: CFO Award for Publicly Traded Companies in Virginia, Virginia Business magazine.

See also

• Norfolk Southern
• Charles W. Moorman
• Canadian Pacific Railway
• Association of American Railroads

External links

• Norfolk Southern Corporation official website