Canadian National also reported a 3% increase in revenue and an 11% increase in operating earnings in the fourth quarter.
Photo: Christinne Muschi/Bloomberg News
Canadian National Railway Co. named a new chief executive officer and made changes to its board Tuesday, moves that will allow the railroad operator to avert a proxy fight.
The Canadian railroad operator named longtime railroad executive Tracy Robinson as CEO and president. Also, U.K.-based activist TCI Fund Management Ltd. agreed to drop its proxy contest at Canadian National, which named a new independent director and plans to appoint two new independent directors with North American railroad experience by its annual meeting.
TCI has criticized Canadian National for offering to buy Kansas City Southern for around $30 billion and nominated four people to its board. Rival Canadian Pacific CP -0.15% Railway Ltd. ultimately clinched a $27 billion deal to take over Kansas City Southern. TCI and others had pushed for the ouster of Canadian National CEO Jean-Jacques Ruest.
Ms. Robinson comes from infrastructure firm TC Energy and before that spent three decades at rival Canadian Pacific. The new director is Jean Charest, who was the premier of Quebec from 2003 until 2012 and now works as a lawyer. Current director Shauneen Bruder was also made vice chair.
The company said Ms. Robinson’s position will be effective Feb. 28 and Mr. Ruest will remain in an advisory role to assist with the transition until March 31.
Canadian National also reported fourth-quarter earnings Tuesday, including a 3% increase in revenue and an 11% increase in operating earnings. It said it expects adjusted diluted earnings per share to increase 20% in 2022.
Canadian Pacific and Kansas City Southern had reached a $25 billion deal in March before Canadian National submitted a topping bid. That prompted Kansas City Southern to switch partners, before a regulatory panel that must bless railroad mergers denied Canadian National’s plans to use a temporary voting trust, a key element of its proposal.
TCI, which has a more than 5% stake in CN, had named Jim Vena, a former executive of railroad giant Union Pacific Corp. UNP -0.40% , as its choice for CEO. He was also supported by another activist investor involved, Elliott Management Corp. Mr. Vena later withdrew his name from consideration, the company said in December.
TCI also holds a significant stake in Canadian Pacific.
Write to Cara Lombardo at [email protected] and Ben Dummett at [email protected]
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Appeared in the January 26, 2022, print edition as ‘Canadian National Names CEO, Averts Proxy Contest.’
