June 7, 2016 / 11:52 AM / 3 years ago

CN Rail chief executive Claude Mongeau resigns

(Reuters) - Canadian National Railway Co Chief Executive Claude Mongeau, who returned to work in January after a six-month sick leave, will step down at the end of this month due to the effects of his disease.

Canadian National Railway Co Chief Executive Officer Claude Mongeau addresses the Winnipeg Chamber of Commerce on grain transportation in Winnipeg April 9, 2014. REUTERS/Fred Greenslade

The announcement was a surprise. Mongeau at the beginning of the year said that he was looking forward to remaining chief executive after returning from medical leave. He went on leave in August 2015 after he was diagnosed with a rare type of tumor in his throat.

CN Rail, the country’s biggest railway, said Chief Financial Officer Luc Jobin would replace Mongeau as president and CEO, effective July 1.

“I was filled with joy returning at the helm earlier this year, but I gradually came to realize that it is difficult to fulfill such a demanding ‎role given my new condition as a laryngectomee,” Mongeau said in a statement.

He joined CN Rail 22 years ago and was CFO for 11 years, before taking over the reins of the company six-and-a-half years ago.

Jobin joined CN Rail in 2009 as CFO and executive vice president. He ran the company during Mongeau’s medical leave.

Speaking with the use of a voice prosthesis during a January 2016 call with analysts, Mongeau said he wanted to stay on at the helm of CN.

“I have a new voice. It is a bit squeaky, but I am full of energy and I’m looking forward to lead CN to new heights in the future,” Mongeau said at the time. “We’re investing for the future. I hope to be part of it for many years to come, if you will allow me.”

As a result, Mongeau’s early retirement surprised analysts.

“While an earlier retirement for Mr. Mongeau was always a possibility following last year’s health issues, we were under

the impression that his return was for the long run,” wrote BMO analyst Fadi Chamoun in a note to clients on Tuesday.

Chamoun credited Mongeau for assembling a strong team to lead CN and called Jobin a “highly respected and battle-tested executive.”

Chamoun said CN could hire a new finance chief from outside the company, but it also has “several potential candidates” internally.

Reporting by Anet Josline Pinto in Bengaluru and Allison Lampert in Montreal; Editing by Nick Zieminski

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