Canadian Pacific Railway appoints Hunter Harrison as president and CEO
June 29, 2012
In a widely anticipated move, Class I railroad carrier Canadian Pacific Railway formally named Hunter Harrison as its president and chief executive office and a member of its Board of Directors.
Harrison is well known throughout the freight railroad sector, with a railroad career spanning nearly 50 years. He previously served as present and CEO of Canadian National Railway Company from 202-2009 and president and CEO of the Illinois Central Railroad.
During his time at CN, Harrison was widely known for his focus on “precision railroading,” which requires cargo to be ready when rail cars arrive for loading or risk being left behind, as noted in a Wall Street Journal report.
“CP is an incredible franchise with significant market opportunity, solid infrastructure, and innovative and hard-working employees,” said Harrison in a statement. “I am proud to be working with one of North America’s iconic companies and I look forward to quickly getting to know the priorities of CP’s customers, shareholders, employees, and the communities served by the railway.”
Harrison replaces Fred Green, whom left CN in May wake of a proxy vote by activist investor Bill Ackman, head of Pershing Square Capital Management, and the single largest CP shareholder with a 14.1 percent stake in the company. Tension between CP and Pershing Square had been brewing for several months, with Ackman calling for a proxy vote when the CP board declined to replace Green as CEO.
A Globe and Mail report published in May said Ackman had gathered tremendous support from CP shareholders and proxy advisory firms to elect a dissident slate of seven directors, which would lead to management changes and cost-cutting at CP, which the report observed “is underperforming its peers.”
CP’s first quarter operating ratio was 80.1 percent, whereas most other Class I railroads operating ratios are in the 60s.
On May 9, CP said that it was successfully executing on its Multi-Year Plan, which was focused on driving operational improvements, and it highlighted some of the inroads the company had made, including: a 45 percent improvement per car miles per day to an all time record; a 23 percent improvement in terminal dwell time to an all time record, and a 25 percent improvement in train speed, among others.
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