Activist investor Bill Ackman’s company Pershing Square Capital Management has named the team of board members it suggests should be elected at Canadian Pacific railway at the upcoming annual meeting.
CP received a letter with a call for a meeting of shareholders to elect five Pershing Square nominees to the board including Ackman himself. This is in keeping with Ackman’s promise to try to replace the minority of the board, along with his intention to convince shareholders to make leadership changes. “We expect that once our nominees are elected to the board with the mandate from shareholders we’ll be able to work with the rest of the board to get to solve the management problem,” Ackman said in a recent interview with Canadian Business. “There needs to be a change at the top. We think Hunter’s the best guy, but if someone else had a suggestion, we’d listen,” he said.
This play comes after an announcement from Canadian National Railway that Ackman’s first choice for the CEO slot at CP, Hunter Harisson, had breached or planned to breach his non-compete contract with CN (where he was CEO until 2009). As a result, CN suspended his pension and other benefits—a package worth about US$40 million. Ackman called the lawsuit “frivolous” and said Pershing Square would protect Harrison from any harm or loss caused by it. Although, he doesn’t expect there will be any.
The date of the shareholder meeting has been set for Thursday, May 17, 2012 in Calgary.