Canadian National CEO gets off the train

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REUTERS/Christinne Muschi

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NEW YORK, Oct 20 (Reuters Breakingviews) - Don’t call it a settlement: Jean-Jacques Ruest, chief executive of $88 billion railroad Canadian National Railway (CNR.TO) and target of activist investor TCI Management, struck a defiant note while announcing what the company called his "planned retirement" on Tuesday. He will be gone after January, but there’s still a lot left to fight over.

Chris Hohn's TCI had attacked Canadian National’s failed push to acquire Kansas City Southern (KSU.N) as well as its performance overall under Ruest read more . The activist subsequently nominated a slate of directors and blasted a new operating plan. Ruest underlined during Canadian National's earnings call on Tuesday that the company will not simply hand his job to TCI’s preferred CEO candidate, and he dismissed the activist’s plans for the company as “vague.”

Canadian National’s adjusted operating expenses as a percentage of revenue were lower than at peer Canadian Pacific Railway (CP.TO) last quarter, a key point in the dispute with TCI. But with the ongoing supply chain crunch squeezing the industry, TCI is unlikely to back off just yet. The battle with Ruest's boardroom colleagues will probably rage on. (By Jonathan Guilford)

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Editing by Richard Beales and Amanda Gomez

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