Mark Szakonyi, Daily Content Editor | Jan 09, 2012 10:08AM EST
Canadian Pacific Railway directors unanimously rejected the push by an activist hedge fund investor to replace the company’s CEO with the former chief of rival Canadian National Railway.
In a letter to shareholders, CP Chairman John Cleghorn wrote that Fred Green has the board’s “full support” in executing the railroad’s plan “to achieve a low 70s operating ratio in the next three years.”
William Ackman, principal of Pershing Square Management, has been pushing to replace Green with Hunter Harrison, who helped make CN one of the best-run railroads in North America.
Cleghorn wrote that a management shake-up “would be detrimental” to the company, but the directors reiterated their invitation to Ackman “to join our board so that a constructive board-level dialogue based on all the relevant facts and information can commence.”
Pershing Square acquisition of a minority stake in CP in the fall spurred suggestions of a potential outright sale, but Ackman said he was interested in boosting the railroad’s value, not selling it. Pershing Square owns a roughly 14 percent stake in the railroad.
-- Contact Mark Szakonyi at mszakonyi@joc.com. Follow him on Twitter @Szakonyi_JOC
