By Justin Franz
MONTREAL — One of Canadian National’s largest shareholders formally launched its effort to shake up the Class I’s leadership after a failed bid to acquire Kanas City Southern. TCI Fund Management has called for CN CEO JJ Ruest to resign and for four new board members to be appointed.
The call for change comes after the U.S. Surface Transportation Board torpedoed CN’s plans to merge with KCS. That decision means that Canadian Pacific and KCS will most likely merge.
TCI has named four new board members it would like to see at CN. Gilbert Lamphere is the current chairman of MidRail Corporation and has been on the board of numerous railroads, including CSX, Florida East Coast, CN, Illinois Central and MidSouth. Allison Landry is currently an independent director on the board of XPO Logistics, Inc. Rob Knight is the former chief financial officer of Union Pacific. And Paul Miller was an executive at CN from 1978 until 2011. If TCI’s nominees are voted onto the board, they are expected to name Jim Vena, a long-time CN and Union Pacific executive who retired from the industry earlier this year as the new CEO.
“CN is a great company, and it owns a unique asset – the best rail network in North America. However, the business has been underperforming for too long, so change is required. We did not seek a proxy fight, but without urgent action, CN’s operational and financial performance will continue to lag its peers under a Board that lacks the right railroad experience and operational expertise,” said Chris Hohn, TCI Founder and Managing Partner.
TCI has called for a shareholder meeting as soon as possible. CN said that it had received TCI’s notice for a meeting but as of late Tuesday no session had been scheduled.