Prominent business leader Paul Haggis joins move to revamp CP Rail board

NEW YORK, N.Y. - Pershing Square Capital Management has lined up another prominent Canadian business leader in its efforts to shake up management at Canadian Pacific Railway Ltd. (TSX:CP), which include a campaign to replace current CEO Fred Green.

Paul Haggis, 59, chairman of Alberta Enterprise Corp., a venture capital initiative created by the Alberta government, is the latest candidate to join the nominees for management change being put forward by Bill Ackman, CEO of the New York hedge fund.

"I am honoured to join this outstanding group of highly respected business leaders in this important effort to restore this icon of Canadian history and pillar of our economy," said Haggis, a former head of the Ontario Municipal Employees Retirement System or OMERS.

Haggis, Ackman and four other business leaders plan to stand for election to the CP board at the company's annual shareholders meeting on May 17.

Canadian Pacific later issued a statement in response saying it believes that "the best interests of shareholders are served by the continued execution of the Multi-Year Plan, which is already producing results under the oversight of an engaged and qualified board."

Ackman, whose New York-based hedge fund is CP's largest shareholder with just over 14 per cent of its stock, has been demanding changes for months.

Ackman has been pushing for Green's replacement with Hunter Harrison, retired CEO of rival Canadian National Railway Co. (TSX:CNR), a legend in the industry who turned CN into North America's most efficient railway through relentless cost cutting.

Harrison has confirmed he is interested in the job and CN has retaliated by cancelling almost $40 million in future pension and other benefit payments for what it says is his breach of agreements involving dealings with competitors.

Ackman has said he'll cover the amount Harrison loses in pension and benefits from CN if he becomes Canadian Pacific's chief executive.

Ackman has attacked Green's track record in reducing CP's operating ratio, a measure of how much of the railway's revenue is required to pay for its operating activities. The lower the number the better.

Harrison was able to reduce CN's operating ratio to the best among major railways in North America, although critics say comparisons are difficult because the two companies have largely different types of customers and infrastructure.