Virginia CFO Award for Publicly traded companies: James A. Squires, Norfolk Southern Corp., NorfolkJuly 30, 2012 6:00 AM
by Donna C. Gregory
With higher fuel costs and stagnant consumer spending, 2011 shouldn’t have been a stellar year for transportation companies.
But one, Virginia-based Norfolk Southern Corp., faced down those challenges and reported its best year ever, setting records for revenues, operating income, net income and earnings per share. The company’s finance team also received International Finance Review’s “Deal of the Century Award” for its $400 million, 6 percent, 100-year bond issue.
Norfolk Southern’s CFO, Jim Squires, played a vital role in those successes.
“His oversight allowed Norfolk Southern to control expenses, even while adding critical resources, such as engineering and conductors, handling increased traffic volume and managing higher diesel fuel costs,” says Wick Moorman, the company’s chairman, president and CEO.
Ironically, Norfolk Southern’s CFO doesn’t come from a financial background. In 1992, Squires began his career with the company in its law department, having just graduated from the University of Chicago Law School. He served as senior vice president of law and senior vice president of financial planning before being named CFO in July 2007.
“There is something of a pattern there as far as Norfolk Southern goes,” Moorman says. “Our previous CFO and the CFO before him were both attorneys.
“If you think about it, to be a terrific CFO, which Jim is, you have to have probably five principle attributes,” Moorman continues. “You have to have integrity. You have to have energy. You have to be intelligent. You have to be able to work within the world of accounting and corporate finance, and then last of all, you have to have great judgment. When I think about that role, I think Jim combines all of them.”
One key to Squires’ success at Norfolk Southern has been his ability to step outside of his own department to learn how other divisions in the company function. These interdepartmental visits have allowed Squires to uncover money-saving efficiencies, helping the company grow and maximize return to shareholders.
“He’s always in a learning mode,” Moorman says. “He’s made it his business to get out and understand how the railroad performs.”
That knowledge undoubtedly helped Squires as Norfolk Southern chugged through the worst of the recession in 2009. “We saw our revenues decline by 25 percent,” Squires says. “The recession was pretty brutal on our business.”
The next year, Norfolk Southern’s executive team began to see signs that the nation’s economic engine was going to accelerate.
“We began hiring pretty aggressively and adding other resources to position ourselves for a recovery,” Squires recalls. “By the time 2011 came along, we had all the human resources, as well as the equipment and track we needed. All of that was in place, so we were able to handle the business growth without a commensurate level of expenses in 2011.”
Norfolk Southern continues to invest in its future. The company will spend $2.4 billion this year on capital improvements, including new track, signal systems and trains.
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