(The following story by Stacie Hamel appeared on the Omaha World-Herald website on January 30.)
OMAHA, Neb. — Jim Young, president and chief executive of Union Pacific Corp., will become chairman of the board of directors Feb. 1 after Dick Davidson’s retirement.
Davidson will retire Jan. 31 after a 47-year railroad career that began with a brakeman’s job and ended with running the nation’s largest railroad.
The board elected Young on Tuesday during a meeting at U.P.’s downtown Omaha headquarters. Young, who has been with U.P. for 29 years, was elected president and chief operating officer in 2004 and was named chief executive officer Jan. 1, 2006.
The board also voted Tuesday to buy back up to 20 million shares of stock, about 7 percent of the outstanding shares, and to increase the quarterly dividend by 17 percent to 35 cents per share.
The share-repurchase will be completed by the end of 2009. The increased dividend is payable April 2 to stockholders of record Feb. 28.
The board’s decision followed an earnings report last Thursday of a 64 percent increase in fourth-quarter per-share earnings, compared with the same period in 2005, and a 57 percent increase in per-share net income for the year, compared with 2005.
Young said Tuesday that 2006 was the company’s “best year ever.”
“Looking ahead, we believe our future earnings and cash from operations will be sufficient to invest in growth opportunities, maintain our balance sheet and provide cash to further enhance shareholder value,” he said.
The railroad had struggled from 2003 to 2005 with slowed service, bad weather, congestion, high fuel prices and record demand coinciding with a shortage of train-service workers. Those problems affected the company’s financial performance.
With his appointment as chief executive in January 2006, Young said that U.P. had built momentum for a good performance in 2006 after a disappointing 2005.
Young said then that he planned to focus on improving customer service, enhancing the company’s return on capital and finding ways to expand capacity.
On Tuesday, the board also paid tribute to Davidson, who had stepped down a year ago as chief executive after eight years.
“We all owe Dick a huge debt of gratitude for his leadership and vision in helping create today’s Union Pacific,” Young said. “We wish him a long, healthy and happy retirement.”
Davidson grew up on a farm near Allen, Kan. He started his railroad career in 1960 as an 18-year-old brakeman and conductor for Missouri Pacific Railroad, while also attending college. He eventually graduated from Washburn University with a degree in history.
Missouri Pacific offered him a management trainee spot and he moved up the company ladder, managing its Little Rock, Ark., district and holding other jobs. He joined Union Pacific when it merged with Missouri Pacific in 1982 and moved to Omaha as vice president of operations in 1986.
He became chairman and chief executive of the railroad in 1991 and chairman and CEO of the corporation in 1997. During his time with Union Pacific, the railroad’s operations grew substantially, including a merger with Southern Pacific Railway. Davidson’s Omaha contributions include moving the corporate headquarters to Omaha, despite talk that it might end up in Texas or California, and construction of a new downtown corporate headquarters building.
U.P.’s shares rose $1.42 Tuesday to close at $96.98 in New York Stock Exchange trading.
(World-Herald Staff writer Steve Jordon contributed to this report.)