Canadian National Railway Co. said Chief Executive Officer Jean-Jacques Ruest plans to retire by the end of January, handing an apparent victory to a major shareholder that had been pressuring him to step down.

The surprise announcement comes one day after TCI Fund Management Ltd., CN’s second-largest investor, released a presentation on its plans to make the railway more efficient and profitable. Ruest’s departure “is a clear admission by the board that change is needed,” TCI said in a statement.

The investment firm, which is run by billionaire Chris Hohn, has nominated four directors to CN’s board and pushed for Ruest to be replaced with industry veteran Jim Vena, the rail company’s former chief operating officer. It made clear it would continue its campaign to shake up the board.

“Dismissing the same CEO that the board put in place just three short years ago is a good start, but it does not address the fundamental problem of a lack of leadership, failed strategic oversight, and the vacuum of operational expertise at the board level,” TCI said in a statement about Ruest’s departure.

Canadian National jumped as much as 6.2% to $132 in U.S. post-market trading. The stock is up 13% for the year in New York trading.

In a conference call Tuesday, Ruest said the board is looking for the best possible replacement for him and said TCI’s proposal for change “is not a plan in itself.”

The board “is not on the clock. It doesn’t mean they will go slow,” Ruest said of the CEO search. “I am staying until the end of January or whenever is required to do a smooth transition. At this point we are looking for quality and sometimes quality takes a little time.”

“I would like to thank JJ for his dedicated service to CN over 25 years and as CEO since 2018. He has provided the company and all of our stakeholders with strong and inspired leadership,” said Robert Pace, CN’s chairman, in a statement.

Pace said Ruest had deferred discussions on his retirement plans in order to see the company through the potential merger with Kansas City Southern and the introduction of its new strategic plan in September.

But it was the $30 billion takeover offer for Kansas City Southern that ultimately led to TCI’s decision to begin a campaign to drop Ruest and change the board. The investment firm said the bid was doomed to fail and exposed Canadian National to unacceptable financial risk.

The merger collapsed when U.S. regulators blocked a key provision in the deal. Kansas City Southern has agreed to be acquired by Canadian Pacific Railway Ltd., CN’s smaller rival, in a deal that still must undergo an antitrust review.