Tracy Robinson is the first woman to lead a major Canadian freight railway.Chris Bolin/The Globe and Mail
Canadian National Railway Co. named energy and rail veteran Tracy Robinson its new chief executive officer as Canada’s largest railroad reached a truce with the activist investor who pushed the company to remake its board of directors and improve its financial performance.
Ms. Robinson is the first woman to lead a major Canadian freight railway. Currently president of a TC Energy division, Ms. Robinson replaces chief executive officer Jean-Jacques Ruest, who is retiring after a 25-year career at the Montreal-based railway.
Mr. Ruest and certain directors of CN were the target of a months-long campaign by major shareholder TCI Fund Management to overhaul the company’s leadership after CN failed in its US$29.8-billion takeover bid for U.S. railway Kansas City Southern. CN lost the battle for KCS to rival Canadian Pacific Railway Ltd. when U.S. regulators ruled against CN’s plan last summer.
TCI said it was unhappy with CN’s financial and stock performance in recent years, arguing the railway needed improvements in management and operations. CN in October announced the planned departure of Mr. Ruest, CEO since 2018, amid pressure from TCI, its second-biggest investor, with a 5.2 per cent stake.
But CN and TCI said on Tuesday their battle is now over, announcing the two sides have agreed CN and TCI will mutually appoint two independent directors with railroad experience by the spring. Additionally, CN named former politician Jean Charest as an independent director, and director Shauneen Bruder as vice-chair of the board.
Before joining TC Energy, Ms. Robinson worked for 27 years at Canadian Pacific Railway Ltd., holding executive roles in operations and finance. Her appointment becomes effective on Feb. 28.
“She knows the railroad,” Mr. Ruest told analysts on a conference call on Tuesday. “She knows the network. She knows the competition. She’s passionate about railroading. In my view, she is a railroader.”
Ms. Robinson holds a master’s degree from University of Pennsylvania’s Wharton School of Business and a Bachelor of Commerce Degree from the University of Saskatchewan.
“This is a transformational period at CN, and I couldn’t be more excited about the opportunities ahead,” she said in a statement.
She added that she has begun French lessons so she can communicate better with the railway’s francophone employees. Her statement is in part a nod to the controversy ignited by Air Canada CEO Michael Rousseau, who gave a speech last year to a Montreal audience in English and was unable to address reporters in French.
CN chairman Robert Pace said: “Ms. Robinson fully understands and respects Quebec’s rich cultural and linguistic reality and distinctiveness and has made it a personal priority to build proficiency in French.”
CN announced the new CEO as it reported financial results for the fourth quarter and full year of 2021.
CN said it boosted profit by 18 per cent in the fourth quarter, as it shed assets and pared expenses under pressure from TCI.
The company said profit rose to $1.2-billion, or $1.69 a share, up from $1.02-billion ($1.43) in the fourth quarter of 2020. Revenue rose by 3 per cent. The operating ratio, a measure of costs versus sales, improved by 3.1 percentage points to 58.3 per cent.
Operating expenses fell by 3 per cent in the final three months of 2021, compared with the year-earlier quarter. CN attributed the drop to layoffs, lower freight volumes and a stronger dollar.
For the full year, revenue rose by 5 per cent to $14.48-billion. Profit rose to $4.9-billion or $6.89 per share, from $3.6-billion ($5) in the previous year.
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Eric Atkins