Activist shareholder blames CN board as preferred CEO candidate bows out

·2 min read

MONTREAL — An activist shareholder of Canadian National Railway Co. has blamed the company's board of directors for failing to secure its preferred candidate for a new chief executive of the railway.

Montreal-based CN announced on Monday that former CN executive Jim Vena had told the company he was no longer interested in the position, which is opening up as current CEO Jean-Jacques Ruest is set to retire at the end of January.

TCI Fund Management Ltd., which has been a vocal critic of the board throughout CN's attempt to acquire U.S. railway Kansas City Southern this year and pushed for Ruest to step down, had wanted Vena to take on the role as part of a wider overhaul of company management.

"Given the CN board's history of failed CEO appointments, it is not a surprise to us that the board has failed once again to attract the best candidate for the role," the fund said in a statement.

TCI said that the failure, which derails a key part of its turnaround plan for the company, came because the board is "conflicted, and the selection process "flawed and unreliable."

It says that the appointment of a new CEO should be delayed until after a special shareholder meeting set for March, where it hopes its four nominees for the board will be elected.

"The need for change on the CN board has never been more apparent and TCI remains fully committed to bringing much-needed railroad experience to the Board for the benefit of all CN shareholders."

CN said Monday that it has identified and continues to interview "a number of outstanding candidates," and expects to announce a new chief executive in January.

The company did not immediately respond to a request for comment Thursday.

RBC analyst Walter Spracklin said in a note that it seemed unlikely that CN would postpone the CEO appointment.

This report by The Canadian Press was first published Dec. 23, 2021.

Companies in this story: (TSX:CNR)

The Canadian Press

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting