“It's time for a change. With a revitalized board and a new CEO, we are convinced CP will return to its position as a leader” among North America’s Big Six railways, he said in letter to CP shareholders.
Ackman has proposed a much different slate of directors to shareholders. In particular, Ackman wants to have Hunter Harrison as CP’s new CEO. Harrison is known as a ruthless cost cutter who previously ran CN Railway.
Mr. Ackman said management change is necessary. “For the past six years, the board and Mr. Green have led CP down the wrong track,” Mr. Ackman said in his letter with the proxy circular. “Despite this poor record, the board continues to support Mr. Green and the status quo.”
Pershing Square owns 14.2% of the company. Shares are up 60% from a low of $45 when Ackman revealed his stake.
Many shareholders would like to see a shakeup at CP Rail that has a bloated salary structure. However, the company remains a source of Canadian pride and there are a number of shareholders who are suspicious of the young American hedge fund manager.