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Rail News: Canadian Pacific

Pershing Square tabs former NS COO Tobias as seventh nominee for CP's board


Today, Pershing Square Capital Management L.P. announced retired Norfolk Southern Corp. senior executive Stephen Tobias as its seventh nominee for Canadian Pacific’s board. Pershing Square's board nominees will stand for election at CP’s annual shareholders meeting on May 17.

A 40-year NS veteran, Tobias retired in 2009 as vice chairman and chief operating officer. He joined NS in 1969 as a junior engineer and later served as a terminal trainmaster, superintendent, general manager, vice president of transportation, VP of strategic planning, senior VP of operations and executive VP of operations before being named vice chairman and COO in 1998.

Tobias also previously served as a board member for TTX Co., Transportation Technology Center Inc. and the Association of American Railroads (AAR). He at one time was chairman of the AAR’s Safety and Operations Management Committee and the Security Committee.

“Steve understands the cultural and operational ingredients for success and is admired throughout the industry,” said Pershing Square Chief Executive Officer Bill Ackman in a prepared statement. “His experience building and leading the operations of the best run railroad in the United States will make him an invaluable resource to his fellow directors.”

Joining Tobias on Pershing Square’s slate of board nominees are Ackman; Pershing Square partner Paul Hilal; Alberta Enterprise Corp. Chairman Paul Haggis; and Canadian business executives Gary Colter, Rebecca MacDonald and Anthony Melman.

Pershing Square — which has acquired a more than 14 percent stake in CP — is pushing for board and management changes at the Class I, as well as financial and operational performance improvements. The company also has proposed installing former CN President and CEO E. Hunter Harrison in CP’s top post to drive changes.

“I've worked in rail operations my entire career, and can say unequivocally there is no better choice than Hunter to turn around CP,” said Tobias in a prepared statement. “I've known Hunter for 30 years, and his understanding of a company's unique challenges and opportunities has enabled him to deliver tremendous results at all kinds of railroads — large and small, U.S. and Canadian.”

CP Chairman John Cleghorn previously stated that the board already comprises 15 highly qualified directors, including 13 independent members, who have extensive, relevant experience in railroads and complementary industries, and therefore multiple new members aren’t needed. Board officials have extended an offer only to Ackman to become a director.

CP senior executives also continue to stress that elements of a multi-year plan already have been implemented and are producing financial and operational results, such as by driving volume growth, expanding network capacity and controlling costs through efforts to increase asset velocity, and boost efficiency and productivity. The plan is designed to decrease CP’s operating ratio to the low 70s by 2014 and prompt additional reductions afterward, they say.

Contact Progressive Railroading editorial staff.

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