Canadian Pacific Railway Ltd. said Friday another director has resigned, the third departure from the company’s board since a bitter proxy fight ended at its annual meeting with the departure of then-chief executive Fred Green.
As a result of the departure of Tony Ingram and the recent addition of Hunter Harrison as chief executive and a director of the company, the nominees put forward by New York hedge fund Pershing Square Capital Management have eight seats on the 14-member board of directors.
The railway said it did not plan to fill the vacancy created by Mr. Ingram’s departure.
Mr. Ingram had been a member of two CP board committees – one that oversees safety, operations and environment (SOE) and one that oversees management resources and compensation.
Pershing Square became the largest shareholder of Canadian Pacific last year, touching off a months-long battle that resulted in the departure of Green, chairman John Cleghorn and several directors.
Since the annual meeting, David Raisbeck and former Suncor chief executive Rick George have also stepped down from the CP board of directors leaving six members from before the proxy fight.
“Mr. Ingram’s insight and guidance was particularly appreciated by the SOE committee,” CP chairman Paul Haggis said in a brief statement.
“The board wishes to thank Tony for his contributions to the company.”
Mr. Ingram is a former president and CEO of CSX Transportation Inc., part of an American railway system that operates in the eastern United States and the Canadian provinces of Ontario and Quebec.
He had been added to the Canadian Pacific board late last year by the previous leadership and re-elected by shareholders at CP’s annual meeting as a nominee of the previous board.
During the hard-fought proxy fight, Pershing Square had complained that Canadian Pacific’s operating ratio, a key performance metric in the railroad industry that calculates the percentage of revenues spent to operate the railroad, lagged far below what it could achieve.
CP’s previous leadership believed it had a realistic plan to bring the ratio down from 80.1 per cent to 70 to 72 per cent for 2014 through cost cutting and revenue boosting.
It said there are structural factors – its trains have to traverse steep terrain, for example – that prevent it from pushing its operating ratio lower.
But Pershing Square said that under Harrison’s leadership, CP can achieve a 65 per cent operating ratio by 2015.