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Canadian National CEO Retirin 10/20 06:59


   OMAHA, Neb. (AP) -- Canadian National's CEO is retiring instead of staying 
to fight against an investor who has been pushing for his ouster.

   The Montreal-based railroad on Tuesday announced JJ Ruest's decision to 
retire at the end of January without mentioning the pressure it is facing from 
the London-based investment firm TCI Fund. The fund is also seeking several 
operational changes at Canadian National in the wake of its failed attempt to 
acquire Kansas City Southern railroad.

   A special shareholder meeting has been scheduled for March 22 to vote on 
TCI's demands.

   "I have been honored to lead CN during my time as chief executive officer, 
and I am confident that the Company is well positioned to continue to thrive 
following my retirement," Ruest said in a statement.

   CN Board Chairman Robert Pace said Ruest delayed discussing his retirement 
plans while the railroad was trying to acquire Kansas City Southern this summer 
and until after the railroad announced a new strategic plan last month. 
Ultimately, Kansas City Southern chose to accept a rival $31 billion buyout 
offer from Canadian Pacific railroad after regulators rejected part of CN's 
acquisition plan.

   Canadian National has urged investors to back its own strategic plan that 
calls for cutting $550 million in costs, reinstating stock repurchases and 
delivering 20% growth in earnings per share in 2022.

   TCI has said Canadian National hasn't been doing enough to improve its own 
operations and it shouldn't have pursued Kansas City Southern. TCI, which owns 
5% of CN's stock, has nominated four new directors who would then help choose a 
new CEO for the railroad. TCI said Tuesday it will continue to press for 
changes after Ruest's retirement.

   "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," said Chris Hohn, TCI's founder and portfolio 
manager. "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."

   TCI urged Canadian National to consider hiring the CEO candidate it is 
backing but the railroad said it plans to conduct a global search for its next 

   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.

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