Long-term shareholders CIFF Capital UK LP and The Children’s Investment Master Fund, acting by their investment manager TCI Fund Management Limited (CIFF Capital UK LP, The Children’s Investment Master Fund and TCI Fund Management Limited, together, “TCI”), comments on the resignation of Canadian National Railway Company’s CEO, J.J. Ruest.
“We appreciate CN’s Board of Directors listening to the concerns of its shareholders, recognizing it has created a problem for the Company and taking TCI’s advice to implement change. Dismissing the same CEO that the Board put in place just three short years ago is a good start, but it does not address the fundamental problem of a lack of leadership, failed strategic oversight, and the vacuum of operational expertise at the Board level. Putting a new plan out a month ago without having the CEO needed to implement it is a massive corporate governance failure and puts the future of the Company at risk. The good news is TCI has a clear plan and the right people available now to fix that,” said Chris Hohn, TCI Founder and Portfolio Manager.
“This announcement is a clear admission by the Board that change is needed, and we are here to help usher in that needed change as quickly as possible. We have already identified an excellent CEO candidate in Jim Vena, who is available now, and we encourage the Board to meet with him immediately to secure his leadership. In addition, to solve the governance crisis the Board has created for itself, the Board should meet with the four independent nominees TCI has put forward and expedite their appointment to the Board, effective immediately. We also expect that given the history of failed CEO appointments, the Board would welcome the advice, expertise and participation of TCI’s nominees on the search committee. As the Board has demonstrated with this announcement change cannot wait.”
About CEO Candidate Jim Vena
Mr. Vena has a proven 40+ year track record as an exceptional railroad operator. He spent 40 years at CN, where he started as a unionized employee in 1976 and worked his way up to become Chief Operating Officer from 2013 until his retirement in 2016. Most recently, during his 2.5 years as Chief Operating Officer and Senior Advisor to the Chairman at Union Pacific, Mr. Vena drove a huge improvement in the company’s operations, service, efficiency and profitability, resulting in a 650bps improvement in the operating ratio, US$1.4 billion in efficiency savings and the best service metrics in the company’s history. Mr. Vena is a Canadian citizen who was raised in Jasper, Alberta.
Read TCI’s strategic plan to strengthen CN’s governance, leadership and network, and about the independent, highly-skilled board candidates at www.CNBackOnTrack.com.
Kingsdale Advisors is acting as strategic shareholder and communications advisor to TCI. ASC Advisors is acting as communications advisor to TCI. Allen McDonald Swartz LLP, Fasken Martineau DuMoulin LLP and Schulte Roth & Zabel LLP are acting as legal counsel to TCI.
About TCI Fund Management
Founded in 2003 by Sir Christopher Hohn, TCI Fund Management Limited, the investment manager of CIFF Capital UK LP and The Children’s Investment Master Fund, is a value-oriented, fundamental investor which invests globally in strong businesses with sustainable competitive advantages. Using a private equity approach, TCI Fund Management Limited conducts deep fundamental research, constructively engages with management and adopts a long-term investment horizon. For more information on TCI Fund Management Limited and its ESG policy, visit www.tcifund.com/ESG. TCI Fund Management Limited is authorised and regulated by the Financial Conduct Authority.
TCI has been a CN shareholder since 2018. TCI currently owns more than 5% of the shares outstanding (valued at US$4.3 billion) and is committed to the long-term success of CN.
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