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2/27/2023
Union Pacific Railroad’s board yesterday announced it will replace Lance Fritz as CEO sometime this year.
The announcement follows pressure from UP shareholder Soroban Capital Partners LP to replace Fritz with a "seasoned executive who has a proven track record of railroad operating excellence," Soroban officials said in a press release.
Soroban cited UP's "significant underperformance" during Fritz's eight-year tenure as CEO. In a Feb. 26 letter to UP's board, Soroban cited UP's "total shareholder return as the worst" in the rail industry.
"Among all S&P 500 companies, UP is rated by employees as the worst place to work and has the lowest employee CEO approval rating (ranked 500th out of 500 in both)," Soroban’s letter stated. "The company is not delivering on its commitment to customers, and the Surface Transportation Board has singled out UP as providing the worst service among the Class I railroads."
Soroban urged UP's board to consider hiring its former Chief Operating Officer Jim Vena as Fritz's successor. Vena joined UP as COO in 2019, following 40 years with CN. Vena left UP in June 2021.
UP officials said a board task force has been working with an outside consultant on UP's succession plan since November 2022.
Fritz "has capably led our company during a time of significant challenge and change, positioning Union Pacific to deliver long-term sustainable value for shareholders and customers," said Michael McCarthy, the board’s lead independent director, in a press release.
Fritz said he will work with the board to identify the company's next CEO.
"Union Pacific has embarked on a transformative journey that will result in stronger, more consistent service for our customers, with enhanced earnings growth and value creation for our shareholders," said Fritz. "Union Pacific has been my home for 22 years and I am confident that now is the right time for Union Pacific's next leader to take the helm."