Ruest will also leave the board next year.
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Canadian National Railway Co. said CEO Jean-Jacques Ruest plans to retire at the end of January, giving an apparent victory to a major shareholder who had been pressuring him to resign.
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The surprise announcement comes a day after TCI Fund Management Ltd., the second-largest holder of CN, published a presentation on its plans to change the railroad. TCI maintains that CN must “urgently” take steps to improve efficiency and profitability.
The firm, led by billionaire Chris Hohn, nominated four directors to the board and lobbied for Ruest to be replaced by industry veteran Jim Vena, CN’s former chief operating officer.
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In a conference call Tuesday, Ruest said the board is looking for the best possible replacement for him. “They are not on the watch. It does not mean they will be slow, ”he said. “I will stay until the end of January or as needed to make a smooth transition. At this point, we are looking for quality, and sometimes quality takes a little time. “
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Montreal-based Canadian National said Ruest will also leave the board next year. “I would like to thank JJ for his dedicated service to CN for 25 years and as CEO since 2018. He has provided the company and all of our stakeholders with strong and inspired leadership,” said Robert Pace, president of CN, in a statement. .
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Pace said Ruest had postponed discussions about his retirement plans to see the company through the possible merger with Kansas City Southern and the introduction of its new strategic plan in September.
But it was the $ 30 billion takeover offer for Kansas City Southern that ultimately led to TCI’s decision to begin a campaign to remove Ruest and change the board. The investment firm said the offer was doomed and exposed Canadian National to unacceptable financial risk.
The merger collapsed when US regulators blocked a key provision of the deal. Kansas City Southern agreed to be acquired by Canadian Pacific Railway Ltd., CN’s smaller rival, in a deal that has yet to undergo an antitrust review.
“Firing the same CEO the Board established just three years ago is a good start, but it does not address the fundamental problem of lack of leadership, failed strategic oversight and the operational experience gap at the Board level. “TCI said in a statement regarding Ruest’s departure.
Reference-montrealgazette.com