OMAHA, Neb. (AP) — The CEO candidate backed by an investor who is pushing for changes at Canadian National railroad has dropped out of the running, but the company is moving forward with plans to name a new top executive next month.
Canadian National said Monday that Jim Vena told the Montreal-based railroad's board Sunday that he is no longer interested in the CEO job. Vena is a former CN executive who also led operations at Union Pacific railroad for a couple years.
The railroad's current CEO JJ Ruest has announced plans to retire at the end of January after CN failed to acquire Kansas City Southern railroad earlier this year.
Vena was recommended for the job by the London-based investment firm TCI Fund that has nominated four new directors and recommended that CN focus on cutting costs and improving its own operations. Officials from TCI, which owns 5% of CN's stock, didn't immediately respond to questions Monday.
TCI has said it doesn’t believe the new strategic plan CN executives outlined in September doesn’t do enough even though it calls for cutting $550 million in costs, reinstating stock repurchases and delivering 20% growth in earnings per share next year.
Canadian National has said that TCI's particular focus on cutting costs everywhere possible is an outdated approach that would hurt the railroad in the long run because it would likely degrade its service.
Canadian National lost out in the bidding for Kansas City Southern after regulators rejected part of CN’s acquisition plan. Instead, Kansas City Southern went with a rival $31 billion buyout offer from Canadian Pacific even though that offer was lower.
A special shareholder meeting has been scheduled for March 22 to vote on TCI’s demands.
Canadian National is one of the largest railroads in North America and it operates nearly 20,000 miles of track crossing Canada and crossing the U.S. Midwest south to the Gulf Coast.