Newspaper article The Canadian Press

Pershing Square's Nominees to Canadian Pacific Board Gain More Support: Pershing Nominees to CP Board Gain Support

Newspaper article The Canadian Press

Pershing Square's Nominees to Canadian Pacific Board Gain More Support: Pershing Nominees to CP Board Gain Support

Article excerpt

An attempt by a New York investment firm to have its nominees join the board of directors at Canadian Pacific Railway Ltd. and replace chief executive Fred Green is gaining momentum.

Pershing Square Capital Management said Wednesday that proxy advisory firm Glass, Lewis & Co. and credit rating agency Egan-Jones Ratings Co. are now backing its plan to revamp the board at the railway.

Pershing, headed by Bill Ackman, is seeking to have its seven nominees join CP's 16-member board and replace Green with Hunter Harrison, former chief executive of rival Canadian National Railway Co. (TSX:CNR).

"We are delighted that proxy advisers Glass Lewis and Egan Jones have joined ISS in strongly endorsing change at CP," Ackman said in a statement.

"Bolstered by a shareholder mandate for change, in just eight days the nominees for management change will have the opportunity to reset the board's culture, deliver fresh views and perspectives and help lead CP through a CEO change and toward a brighter future."

Pershing Square is CP's largest shareholder with a 14.2 per cent stake in the railway.

In a report, Glass Lewis lead analysts Mark Grothe and Reuben Edelson noted the Pershing Square presents "a compelling case for the need to overhaul CP's current leadership."

The firm recommended shareholders vote for Pershing's seven nominees as well as seven of the company's nominees to the board.

"We also agree that simple board representation isn't likely to produce the results that shareholders desire," the analysts wrote in the report.

"Rather, an injection of all seven of the dissident's nominees is warranted, in our view. Further, we support Pershing Square's plan to replace Mr. Green. While Mr. Harrison's track record suggest he's could realize substantial improvements at the company, we will leave the selection of the best CEO candidate for CP to the newly reconstituted board of directors."

The support from Glass Lewis and Egan Jones follows the backing of proxy advisory firm ISS and the Ontario Teachers' Pension Plan.

Shareholders will vote on the nominees at the railway's annual meeting, set for May 17 in Calgary. …

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