CN Rail Has a New CEO

TC Energy's Tracy Robinson will take the reins as CEO upon JJ Ruest’s previously announced retirement at the end of February.

Matthew Young, CFA 26 January, 2022 | 8:13AM
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Train Tracks

On January 25, 2022, CN Rail (CNR) selected Tracy Robinson--currently a member of the leadership team at pipeline company TC Energy--to take the reins as CEO upon JJ Ruest’s previously announced retirement at the end of February. For background, recall that last October, Ruest announced plans to retire in early 2022.

At the time, we speculated that Ruest’s decision was partly related to pressure from activist investor and large shareholder TCI Fund Management. Following CN's failed bid for Kansas City Southern and also due to CN's margin pullback in recent years, TCI has been pushing for a change in management and the board. Interestingly, as we understand it, TCI initially encouraged CN’s board to oust Ruest and install the precision scheduled railroading specialist and recently retired COO of Union Pacific, Jim Vena. We suspect TCI hoped Vena would reinvigorate CN’s operational prowess (and we would tend to agree with that potential), but in December he withdrew his candidacy.

Robinson has been with TC Energy for about seven years, and is currently EVP and president, Canadian Natural Gas Pipelines and president, Coastal GasLink--positions she has held since late 2018. Prior to that it looks like she spent more than two decades at Canadian Pacific, including time as VP of marketing and roles in finance. Overall, based on commentary in the press release from the board chairman, we suspect Robinson has an impressive resume and is a seasoned leader. We also think her experience in the energy sector could help CN’s business development efforts in that end market. That said, we were somewhat surprised CN didn’t choose a candidate with more direct operational experience in railroading, and we suspect some investors may initially doubt the board’s decision. We expect additional color surrounding CN’s rationale in the quarter ahead as Robinson comes on board and has a chance to share her vision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Canadian National Railway Co177.69 CAD0.27Rating
TC Energy Corp53.70 CAD-0.15Rating

About Author

Matthew Young, CFA  Matt Young, CFA, is an equity analyst with Morningstar.

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