TCI identifies Jim Vena as the Outstanding CEO Candidate
LONDON, September 13, 2021 /CNW/ – Long-term shareholders CIFF Capital UK LP and The Children’s Investment Master Fund, acting by their investment manager TCI Fund Management Limited (together, “TCI”), announce they intend to requisition a timely special meeting of Canadian National Railway Company (TSX: CNR) (NYSE: CNI) (“CN” or the “Company”) shareholders (the “Special Meeting”) shortly for the purpose of refreshing the current Board of Directors (the “Board”) by adding four nominees who will provide the deep railroad operational experience the current Board lacks. TCI’s four independent and highly skilled nominees are Gilbert Lamphere, Allison Landry, Rob Knight, and Paul Miller.
“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.
“The bid for KCS exposed a basic misunderstanding of the railroad industry and regulatory environment. The Board consistently misjudged the STB and displayed flawed decision making, committing billions of dollars to an ill-conceived pursuit of an unattainable asset. CN should focus on getting better rather than bigger.”
“We have assembled an independent, accomplished and world-class slate of director nominees. They all have had long and distinguished careers operating in and analyzing the railroad industry. They bring vast railroad experience and knowledge, and they also share a common and very achievable goal: to create a much-needed culture of operational excellence at CN, which is essential if the Company is to reach its full potential.”
“A new, highly-qualified Board with renewed senior management will help ensure CN is put on the right track to the benefit of the Canadian and US economies, shippers, employees and shareholders. CN can do better, and with a new Board, it will.”
New CEO Candidate
“History has shown that with the right leadership railroads can be improved quickly. TCI’s independent and highly skilled nominees, if elected, will help lead and guide the selection of a new CEO. TCI has identified Jim Vena as the outstanding candidate for the position.”
“Mr. Vena has a proven track record as an exceptional operator. His time at CN, where he was a high-performing and well-respected Chief Operating Officer (COO), demonstrates he knows how to run a railroad successfully. During his 40 years at CN, Mr. Vena ran all three geographic regions of the network, so he knows the network intimately and is uniquely qualified to be CEO. More recently, Mr. Vena was the COO at Union Pacific, where he drove a remarkable improvement in the company’s operations, service, efficiency and profitability, resulting in a 650bps improvement in the operating ratio in two and a half years.”
“Mr. Vena has committed to accepting the role of CEO if offered the position in a suitably expedient manner.”
Advocating for a low-carbon railroad industry
Mr. Hohn also said, “Over many years, TCI has established an exceptional reputation as a leader on all ESG issues and policy-making. The firm has an active ESG policy (www.tcifund/ESG) with a particular focus on the risk of climate change. TCI has successfully campaigned for many of its portfolio companies to adopt a Climate Action Plan and to give shareholders a ‘Say on Climate’ advisory vote at their AGMs. These companies include Canadian National, who adopted the policy at its 2021 AGM, Moody’s, Aena, VINCI and Canadian Pacific. If our new independent director nominees are elected, TCI will continue to campaign for CN to lead the industry in all ESG issues, to adopt new technologies to improve the efficiency of its network, and to drive the industry to cooperate in developing and introducing new low-greenhouse-gas-emitting locomotives. This will have the additional benefits of attracting new shippers to the railroads, taking freight off the highways, and generating higher volume growth for the industry.”
Biographies of TCI Nominees (all of whom are fully independent of TCI)
Gilbert Lamphere is currently Chairman of MidRail Corporation, a freight rail company formed to develop and operate overlooked rail infrastructure in North America. As one of the most experienced railroad executives in North America, Mr. Lamphere has 40 years of experience in the rail industry and has been a board member of several public and private railroad companies, including:
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Patriot Rail (2019-2021) – Chairman
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CSX (2008-2015) – Member of the Operations, Finance, Compensation and Public Affairs committees
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Florida East Coast Railway (2000-2007)
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CN (1998-2005) – Chairman-elect of the Finance Committee and a member of the Compensation, Investment and Audit Committee
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Illinois Central Railroad (1990-1998) – Chairman
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MidSouth Rail (1988-1998) – Founder
Mr. Lamphere has also served on the boards of Recognition Equipment (Chairman), Cleveland-Cliffs, R.P. Scherer, Global Natural Resources, Sylvan Inc. and Lincoln Snacks, and was a board member of the Fremont Group, an investment and operating company with over $9 billion of assets.
Mr. Lamphere has been an Overseer of the Harvard School of Business Administration, a Trustee of the New York City Parks Foundation, and Chairman of three educational institutions: Deerfield Academy, Nightingale-Bamford and the Hamlin School. He was Chairman of Princeton University’s 1000-person Development Leadership Council and is currently on the Advisory Board of the Department of Psychiatry and Behavioral Sciences of Johns Hopkins Medicine.
Mr. Lamphere graduated from Princeton University and from Harvard Business School, where he was a Baker Scholar and awarded the Loeb Rhoades Fellow Finance prize.
Allison Landry currently serves as an independent director on the board of XPO Logistics, Inc., a leading North American less-than-truckload carrier and truck brokerage provider and is also a member of the Audit and Compensation Committees.
She previously spent 16 years at Credit Suisse, where she was the lead equity research analyst for the U.S. transportation sector, specializing in the railroad, trucking, airfreight and logistics industries.
Ms. Landry earned an MBA from Boston University, with a concentration in Finance, and a BA in Psychology from the College of the Holy Cross.
Rob Knight is the former Chief Financial Officer of Union Pacific Corporation, a position he held for 15 years before retiring in December 2019. While Mr. Knight was CFO, Union Pacific’s market capitalization grew from $17 billion to over $120 billion. For seven consecutive years, he was named to Institutional Investor magazine’s All-America Executive Team as the top CFO in all of transportation. During Mr. Knight’s 40-year tenure at Union Pacific, he also held a variety of senior executive positions, including General Manager of the company’s energy and automotive business units.
As a proven leader with extensive experience in finance, strategy and corporate governance, Mr. Knight serves as a director at Schneider National Inc. (member of Compensation Committee), Hyliion Holdings Corp. (Chair of Audit Committee) and Carrix Corporation, a private transportation services company.
Mr. Knight holds an MBA from Southern Illinois University and a BA from Kansas State University.
Paul Miller is an expert in transportation, logistics, safety management and regulatory affairs.
Mr. Miller was an executive at Canadian National from 1978–2011. During his 33-year career at the company, Mr. Miller held leadership roles in operations, marketing, and planning. He retired as CN’s Vice President of Safety, Sustainability, and Network Transportation in 2011.
Mr. Miller served on the Safety and Operations Management Committee of the Railway Association of Canada, and the Risk Management Working Committee of the Association of American Railroads.
Since leaving CN, Mr. Miller has been a consultant, board member, volunteer and educator. As a consultant, he has worked with CN, Canadian Pacific Railway, Enbridge, The Railway Association of Canada and the New Brunswick Southern Railway. Mr. Miller was an Adjunct Professor and Railroader in Residence at the University of Alberta’s Canadian Rail Research Laboratory, and he serves on the board of the Chartered Institute for Logistics and Transport in North America, where he holds the Chartered Member (CMILT) designation. Mr. Miller is a registered professional engineer (P. Eng.) in the province of Alberta.
Mr. Miller holds a Master of Science in Engineering in Transportation Planning & Engineering, as well as a Bachelor of Science in Engineering in Civil Engineering, both from the University of New Brunswick. He also holds the ICD.D. designation from the Institute of Corporate Directors, and the Professional Logistician designation (P. Log.) from the Logistics Institute.
Board Removals
The requisition will also include a resolution to remove each of the following four incumbent CN directors:
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Robert Pace
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Kevin G. Lynch
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James E. O’Connor
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Laura Stein
Mr. Pace has served on the Board since October 1994. This period of nearly 27 years well exceeds the 14-year director’s tenure limit advised by CN’s Corporate Governance Manual. While Mr. Lynch, Mr. O’Connor and Ms. Stein, who have all served on the Board for over seven years, have had distinguished and varied careers, TCI’s independent and highly skilled nominees will bring more balance to the Board and will give it a deeper understanding of strategic alternatives and opportunities, as well as a broader knowledge of the operational challenges and possibilities in running a railroad.
Conclusion
TCI’s independent board nominees have significant operational experience and analytical capabilities in the railroad industry. Their election will diversify the Board and give balance to the existing areas of skills, expertise and competence already possessed by the Board.
Information Concerning the Nominees
TCI’s nominees are Gilbert Lamphere, Allison Landry, Rob Knight, and Paul Miller. The table below sets out, in respect of each nominee, his or her name, province or state and country of residence, his or her principal occupation, business or employment within the five preceding years, and the number of shares beneficially owned, or controlled or directed, directly or indirectly, by him or her.
Name and Province or State, and Country ofResidence |
Principal Occupation for the Five Preceding Years |
Number of Common Shares of the Company Beneficially Owned, or Controlled or Directed, Directly or Indirectly |
Gilbert Lamphere (1)(2)Florida, U.S.A. |
Principal of Lamphere Capital Management (a private investment firm that invests in a range of private and public companies) since June, 2000, and Chairman of MidRail Corp. (a freight rail company focused on originating, acquiring, consolidating, and developing integrated rail assets and operations across North America) since July, 2016 |
Nil |
Allison Landry(1)New York, U.S.A. |
Corporate director since August, 2021 and prior to July, 2021, equity research analyst at Credit Suisse (investment bank) |
Nil |
Rob Knight(1)Florida, U.S.A. |
Corporate director since December, 2019 and prior to December, 2019, Chief Financial Officer of Union Pacific Corporation (Class I railroad) |
Nil |
Paul Miller(1)Alberta, Canada |
Board member, and rail and logistics consultant |
Nil |
Notes:
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None of the nominees currently holds any position with the Company.
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Mr. Lamphere served as a director of the Company from March, 1998 until August, 2005.
Boards of Other Reporting Issuers on Which the Nominees Serve
Nominee |
Boards of Other Reporting Issuers on Which the Nominee Serves |
Allison Landry |
XPO Logistics, Inc. |
Rob Knight |
Hyliion Holdings Corp.Schneider National, Inc. |
Other Information Concerning the Nominees
Based on information provided by each respective nominee, each of the nominees is independent of the Company.
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Based on information provided by each respective nominee, none of the nominees: (a) is, at the date of this release, or has been within the previous 10 years, a director, chief executive officer or chief financial officer of any company that (i) was subject to an a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days (each, an “order”) that was issued while such nominee was acting in the capacity as director, chief executive officer or chief financial officer, or (ii) was subject to an order that was issued after such nominee ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while such nominee was acting in the capacity as director, chief executive officer or chief financial officer; (b) is, at the date of this release, or has been within the previous 10 years, a director or executive officer of any company that, while such nominee was acting in that capacity, or within a year of nominee ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (c) within the previous 10 years has become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such nominee.
