Just hours before its annual shareholder meeting, Canadian Pacific Railway Ltd. (CP,CP.TO) announced the resignation of President and Chief Executive Officer Fred Green, effective immediately. Green also resigned as a director and along with five other directors have revealed their decision not stand for re-election at the company's shareholder meeting later in the day.
The move comes after a fierce four-month long proxy battle waged by U.S. activist investor Bill Ackman to unseat Canadian Pacific's board of directors. Ackman's New York-based hedge fund Perishing Square Capital Management LP owns 14.2 percent of Calgary, Canada-based Canadian Pacific and is its biggest shareholder.
Ackman has been pushing for massive changes to Canadian Pacific's board in order to turnaround the company's fortunes. These include the replacement of Green with Hunter Harrison, the former chief of Canadian Pacific's rival Canadian National Railway Co. (CNI, CNR.TO).
The company noted that the views expressed by shareholders about the desire for board change were taken into account while reaching the decision.
Canada's biggest pension funds CPP Investment Board (CPPIB.PK), a Canadian Pacific shareholder, had revealed its intention on its website on Friday to supports Ackman's proposed slate of directors. Last week, proxy advisory firm Institutional Shareholder Services had also recommended shareholders to vote in favor of Ackman's slate.
Another two proxy advisory firms, Glass Lewis & Co. and Egan-Jones, also advised shareholders to vote for Ackman's nominees. Meanwhile, another big Canadian pension fund Ontario Teachers' Pension Plan had publicly supported Ackman's slate.
The other director not standing for re-election are Chairman John Cleghorn, Tim Faithfull, Edmond Harris, Michael Phelps and Roger Phillips.
Ackman had put forward a slate of seven director nominees. They include Ackman himself, Gary Colter, Paul Haggis, Paul Hilal, Rebecca MacDonald, Anthony Melman, and Stephen Tobias. The company said the new Board will meet shortly after the election at the annual meeting.
"Once Pershing Square nominates all seven of its director nominees, there will be only sixteen candidates for the sixteen available positions on the Board," the company noted.
"The Board wishes to thank Fred for his dedicated years of service," Chairman John Cleghorn said.
Green leaves the company following 34 years of dedicated service. Green has been serving as the president and CEO of the company since May 2006. Green began his career at Canadian Pacific in 1978 and has held various positions throughout the railway in operations, sales and marketing, and yield.
Since 1996, Green has held several senior positions at Canadian Pacific including being president and chief operating officer, and being executive vice-president and chief operating officer.
In Thursday's regular trading session, CP is currently trading at $75.69, up $0.82 or 1.10% on a volume of 1.01 million shares. CP.TO is trading on the TSX at C$76.95, up C$1.09 or 1.44% on a volume of 0.67 million shares.
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