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Union Pacific Plans to Name New CEO This Year
Author: Grenville M. Dodge
Date: 02-26-2023 - 18:28
[ WSJ.com ]
Union Pacific Corp. said Sunday it plans to name a new chief executive this year, hours after a major shareholder publicly urged the railroad company’s board to oust Lance Fritz from the job.
Soroban Capital Partners, a New York hedge fund managing about $10 billion, on Sunday disclosed a letter it wrote to Union Pacific directors pushing for the change, arguing that the company has underperformed on Mr. Fritz’s watch. The letter was earlier reported on by The Wall Street Journal.
Soroban is a longtime Union Pacific investor, one of the company’s biggest shareholders with a 1%-plus stake valued at about $1.6 billion.
Soroban argues that Union Pacific, the largest freight-railroad operator in the U.S. with a market capitalization of nearly $120 billion, had ranked worst in key operating metrics including safety, volume growth and total shareholder return during Mr. Fritz’s eight-year tenure, despite the strength of its network. The Omaha, Neb., railroad’s returns to shareholders, including dividends, are the worst on a percentage basis among so-called Class 1 freight railroad operators in that period, according to FactSet.
“We want UNP to prosper,” Soroban founder Eric Mandelblatt wrote. “Unlike typical shareholder engagements which come with numerous demands, Soroban has only one ask: install new leadership who can get the trains to operate safely and on time.”
Soroban is pushing for railroad veteran Jim Vena, 64, Union Pacific’s chief operating officer from 2019 to 2020, to take the top post.
Union Pacific Corp. said Sunday it plans to name a new chief executive this year, hours after a major shareholder publicly urged the railroad company’s board to oust Lance Fritz from the job.
Soroban Capital Partners, a New York hedge fund managing about $10 billion, on Sunday disclosed a letter it wrote to Union Pacific directors pushing for the change, arguing that the company has underperformed on Mr. Fritz’s watch. The letter was earlier reported on by The Wall Street Journal.
Soroban is a longtime Union Pacific investor, one of the company’s biggest shareholders with a 1%-plus stake valued at about $1.6 billion.
Soroban argues that Union Pacific, the largest freight-railroad operator in the U.S. with a market capitalization of nearly $120 billion, had ranked worst in key operating metrics including safety, volume growth and total shareholder return during Mr. Fritz’s eight-year tenure, despite the strength of its network. The Omaha, Neb., railroad’s returns to shareholders, including dividends, are the worst on a percentage basis among so-called Class 1 freight railroad operators in that period, according to FactSet.
“We want UNP to prosper,” Soroban founder Eric Mandelblatt wrote. “Unlike typical shareholder engagements which come with numerous demands, Soroban has only one ask: install new leadership who can get the trains to operate safely and on time.”
Soroban is pushing for railroad veteran Jim Vena, 64, Union Pacific’s chief operating officer from 2019 to 2020, to take the top post.
Union Pacific Plans to Name New CEO This Year