UPDATE 3-Canadian National Railway CEO to retire following investor pressure
(Adds CEO comment from earnings call, details on retirement)
By Amruta Khandekar and Praveen Paramasivam
Oct 19 (Reuters) - Canadian National Railway (CN) said on Tuesday Chief Executive Officer Jean-Jacques Ruest will retire at the end of January, following investor demands for his exit after the railroad operator's failed bid for Kansas City Southern.
TCI Fund Management, which owns 5% of CN, in August pitched former Union Pacific executive Jim Vena for the top job and on Tuesday urged Canada's largest railroad operator to secure his leadership.
"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," TCI Founder Chris Hohn said. The hedge fund had earlier cited the company's "ill-conceived" efforts to pursue the Kansas City merger for demanding Ruest's ouster.
Last month, CN lost a bidding war to create the first direct railway linking Canada, the United States and Mexico as rival Canadian Pacific Railway Ltd signed a $27.2 billion deal to buy Kansas City.
CN has now set up a committee to look for a new CEO both within and outside the company.
"(The board) is not on the clock. It doesn't mean that they will go slow," Ruest said in an earnings call, adding that he would leave it to the board to engage with TCI.
Ruest had deferred discussions on his retirement plans in order to see the company through the merger, it said, and he could helm CN until it names a replacement.
In the third quarter ended Sept. 30, adjusted profit rose 9.5% on a surge in petroleum and chemicals shipments. But its operating ratio, a key profitability metric for investors, worsened to 62.7% from 59.9% a year earlier.
($1 = 1.2365 Canadian dollars) (Reporting by Abhijith Ganapavaram, Amruta Khandekar and Praveen Paramasivam in Bengaluru; Editing by Devika Syamnath)
