U.S. railroad Union Pacific on Sunday stated it expects to call a successor to imagine the place of chief government officer changing Lance Fritz in 2023.

“Union Pacific has been my residence for 22 years and I’m assured that now’s the proper time for Union Pacific’s subsequent chief to take the helm. I look ahead to working with the Board as we establish our subsequent CEO to steer the Firm into the long run,” Fritz stated in a press release.

The announcement comes after U.S. hedge fund Soroban Capital Companions in a letter on Sunday referred to as for Fritz to get replaced.

“In contrast to typical shareholder engagements which include quite a few calls for, Soroban has just one ask — set up new management who can get the trains to function safely and on time,” the letter stated.

Soroban urged Union Pacific to think about former Chief Working Officer Jim Vena as a doable alternative for Fritz saying “no inner candidates are remotely as certified as Vena, and he’s the main exterior candidate accessible.”

The hedge fund, which stated it owns a couple of $1.6 billion stake within the firm, added it sees a change in management may generate about $18 of earnings per share in 2025.

Union Pacific in a press release stated the board is focusing the method on highly-qualified candidates each throughout the business and adjoining industries to establish a CEO able to main the corporate for a long-term tenure.

As a part of the board’s succession planning course of, it has thought of shareholder enter and can proceed to take action, including it has been actively partaking with Soroban Capital since 2017.

Union Pacific reported lower-than-expected fourth-quarter revenue, damage by delayed shipments amid labor shortages and a winter storm that crippled freight operations throughout america.

The event comes after activist investor Nelson Peltz ended his quest for a board seat at Walt Disney this month, after Chief Govt Bob Iger laid out plans to repair the house of Mickey Mouse, cheering traders.

Salesforce and activist investor Elliott Administration are additionally in discussions to achieve an settlement which will finish a doable board problem.