Over 90% of CP Rail shareholders want change at railroad: survey

Scott Deveau Mar 16, 2012 – 3:34 PM ET | Last Updated: Mar 16, 2012 5:22 PM ET

A new poll suggests as many as 91% of Canadian Pacific Railway Ltd.’s shareholders want change at the railroad, and nearly three-quarters of them support activist investor Bill Ackman’s push to replace its chief executive, Fred Green, with Hunter Harrison, the former CEO of rival Canadian National Railway Co.

The survey conducted by Brendan Wood International is based on debriefings of shareholders who represent about a third of CP’s shares, the firm said. The poll results confirm a low level of confidence amongst CP shareholders and an openness to Pershing’s proposed board changes, Brendan Wood goes on to say.

“I feel for [CP chairman John] Cleghorn, his board and Mr. Green in particular,” said Brendan Wood, in a statement. “They are exceptional professionals, simply the first to experience the end of a culture of privacy, if not invisibility of boards. What we call the ‘age of full disclosure’ makes the longstanding traditions of board aloofness totally untenable.

“Investors take governance for granted, see it as ritual,” he added.

The challenge for the board as the proxy fight continues will be to take hold of the issues, said Stewart Borden, Brendan Wood Canada managing partner.

“We feel that the next round of issues will include shareholder perception of the loyalty of both groups, opinion of Mr. Harrison, executive compensation, who’s got real skin in the game and a host of newer concerns which attach to CP stock in the $70′s as opposed to the $40′s,” he said in a statement.

Mr. Ackman’s Pershing Square Capital Management took a 14.2% ownership position in CP last fall and has been pushing for management change since. Its efforts have been rebuffed by the company’s board, however, which has thrown its support behind Mr. Green and his efforts to turn around the company’s chronic underperformance.

Ed Greenberg, CP spokesman, downplayed the significance of the poll.

“The only vote that counts is at the annual meeting,” he said in an email. “We were approached to buy consulting services from Brendan Wood but decided not to spend our shareholders’ money.”