Union Pacific's (UNP - Get Report) share buyback plan is large. 

Fortunately for investors, Union Pacific's CEO, Lance Fritz told TheStreet exactly how it will be executed. 

By 2022, Union Pacific would like to buy back roughly 21% of shares outstanding, and $20 billion worth of stock by 2020. The market cap currently sits at $120 billion. 

So how can investors be assured they'll get their cash? Here's the plan:

"If there's something that happens on our top line, on the demand side, that impacts the cash flow, we make adjustments immediately," Fritz said, after being asked how an imminent economic downturn or recession could impact the buyback plan. Those adjustments, though he didn't specify, can often be layoffs in industrial companies, so that the company protects its operating income. 

In any event, a top priority for the company is lowering its operating ratio, or the percent of sales comprised by operating expenses. "A lot of it is labor productivity," Fritz said, as he explained how the company will get its operating ratio down to below 60% in the next few years. It came down to 63.3% in its latest quarter from 64.3% the year earlier period. "We have fewer locomotives in the network right now because we're using those assets more efficiently," he added. "We have fewer cars on the network. We've reduced operating inventory of freight cars, so there's less work to maintain those freight cars." 

"There are many, many levers that we're using in order to drive that operating ratio," he added. 

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