Canadian Pacific Railway CEO Green is out following proxy vote by company’s largest shareholder

Class I railroad carrier Canadian Pacific Railway Ltd. said ahead of its annual shareholder meeting earlier today that Fred Green, president and CEO, has left the company. This move comes in the 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.

By ·

Class I railroad carrier Canadian Pacific Railway Ltd. said ahead of its annual shareholder meeting earlier today that Fred Green, president and CEO, has left the company.

This move comes in the 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.

Green also stepped down as a CP director along with CP Chairman of the Board John Cleghorn and four other directors. And when Pershing Square nominates its seven director nominees there will be 16 available candidates for the 16 available board positions, the company said.

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, according to a Wall Street Journal report.

The report noted that Ackman laid blame on Green and the board member that have left for fledgling efficiency and stock market performance over the last six years. It has been widely speculated that Ackman plans to tab Hunter Harrison, former CEO of Canadian National Railway as Green’s replacement. Harrison stepped down from CN in 2009 and served in his role there for seven years and 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, the Journal said.

A Globe and Mail report said that in recent weeks 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.

CP said at the time the its board “unanimously believes Pershing Square’s demand that the Company replace Fred Green with Hunter Harrison would delay and damage CP’s value-generating plan, and put the progress and momentum the Company has built at significant risk.”

It added that Pershing Square admitted that this plan amounts to nothing more than replacing one CEO with another, adding that Pershing Square’s nominees have failed to provide any strategic or operational plan that would lead to an improved operating ratio or achieve the unprecedented or unrealistic rate of operating ratio reduction that Pershing Square has promised to shareholders. 


Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Hub Group Resources
Not Your Grandfather's Intermodal
Transportation of freight in containers was first recorded around 1780 to move coal along England’s Bridgewater Canal. However, "modern" intermodal rail service by a major U.S. railroad only dates back to 1936. Malcom McLean’s Sea-Land Service significantly advanced intermodalism, showing how freight could be loaded into a “container” and moved by two or more modes economically and conveniently. As with all new technologies, there were problems that slowed the growth, which influenced many potential customers to shy away from moving intermodal.
Click here to download
Latest Whitepaper
Voice of the Driver 2: Best Practices for Recruiting and Retention
For the past decade and a half, those who predicted the driver shortage have offered their advice on curbing the shortage.
Download Today!
From the August 2017 Logistics Management Magazine Issue
Which carriers, third-party logistics providers, and North American ports have crossed the service excellence finish line ahead of their competitors? Our readers have cast their votes, and now it’s time to introduce this year’s winners of the coveted Quest for Quality Awards.
BMW Takes the Inland Road to Efficiency
Global Logistics: No Shortcuts to Security
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...