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Rail News Home Canadian Pacific

1/31/2012



Rail News: Canadian Pacific

Pershing Square schedules meeting to stress need for CP management changes; CP leaders book road trip to tout progress to investors


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On Feb. 6, Pershing Square Capital Management L.P. plans to hold a town hall meeting in Toronto to provide Canadian Pacific shareholders and other interested parties an opportunity to meet its slate of five nominees for the Class I’s board, who will stand for election at CP’s annual general meeting May 17 in Calgary, Alberta.

The nominees are Pershing Square founder and Chief Executive Officer William Ackman, Pershing Square partner Paul Hilal, and Canadian business executives Gary Colter, Rebecca MacDonald and Anthony Melman. Each of the nominees will attend the meeting.

In addition, Ackman, Hilal and former CN President and CEO E. Hunter Harrison — who Pershing Square leaders have proposed installing in CP’s top post — will discuss and analyze the “need for board and management changes” at CP during the event, Pershing Square officials said in a meeting notice.

However, CP Chairman John Cleghorn maintains that the Class I’s board comprises 15 “highly qualified” directors, including 13 independent members, who have extensive, relevant experience in railroads and complementary industries. Therefore, the board does not need five new members, Cleghorn believes.

CP has extended an offer to Ackman to join the board “so that a constructive board-level dialogue based on all the relevant facts and information can commence and that we can work together for the benefit of all shareholders,” said Cleghorn in a prepared statement.

Pershing Square, which acquired a more than 14 percent stake in CP late last year, is pushing for management changes and performance improvements at the Class I. But CP senior executives stress that elements of the railroad’s multi-year plan already are under way and producing results, such as by driving volume growth, expanding network capacity and controlling costs through efforts to increase asset velocity, and boost efficiency and productivity.

Beginning this week, members of CP’s board and management team are “going on the road” to meet with investors and discuss “the significant progress we have made against our multi-year plan,” said CP President and CEO Fred Green in a letter to employees dated Jan. 30.

“In these meetings, we will explain our detailed plan to bring CP’s operating ratio down to 70 to 72 percent for 2014, and our goal to continue to drive down CP’s OR after that,” he wrote.


Contact Progressive Railroading editorial staff.

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