Union Pacific (UNP.N) Chief Executive Officer Lance Fritz announced on Sunday that he would step down this year to make way for new leadership, following a request from hedge fund Soroban Capital Partners.
Union Pacific stated that a successor would be named this year, and Fritz stated that he was looking forward to working with the board to find a new CEO.
Union Pacific has been Fritz’s home for the past 22 years, and he is confident that now is the right time for Union Pacific’s next leader to take the helm, Fritz said in a statement, without explaining his decision.
Soroban Capital demanded Fritz’s replacement in a letter on Sunday, claiming that he had lost the trust of shareholders, employees, customers and regulators.
In the letter, Soroban founder Eric Mandelblatt stated that new leadership could generate significant shareholder value.
The hedge fund stated that it has a “long-held view that current management is not capable of driving strong operating performance” and that there is a “heightened risk of permanent damage to the franchise if this issue is not addressed.”
The letter also said that “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 urged Union Pacific to consider former Chief Operating Officer Jim Vena as a possible Fritz replacement, claiming that “no internal candidates are remotely as qualified.”
Vena has withdrawn from consideration to lead Canadian National in December 2021.