Union Pacific to find new CEO after pressure from hedge fund
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Union Pacific Corp. said Sunday it plans to name a new chief executive this year, hours after a major shareholder publicly urged the railroad giant’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
UNP,
directors pushing for the change, arguing that the company has underperformed on Fritz’s watch. The letter was earlier reported on by The Wall Street Journal.
Union Pacific said in a statement that its board is focused on finding “highly-qualified candidates both within the industry and adjacent industries.” Among its considerations are a track record of success in safety and operational matters, the company said, crediting Fritz with achieving financial growth in difficult conditions.
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 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.
An expanded version of this report appears on WSJ.com.
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