Canadian Pacific Railway Ltd. is urging shareholders to use the company’s “universal” white proxy to vote in favour of re-electing CP directors to the board.
The white ballot contains the names of CP’s roster of directors and also lists the nominees in an alternative slate being proposed by hedge fund Pershing Square Capital Management LP.
Investor activist Bill Ackman, Pershing Square’s chief executive officer, wants to install former Canadian National Railway Co. chief Hunter Harrison as CP’s CEO.
New York-based Pershing Square is recommending that CP shareholders back an alternative slate of seven directors by casting their votes with a blue proxy.
But Calgary-based CP said that its universal white proxy will allow shareholders to ignore the blue proxy and still make their wishes known.
“CP believes that voting for the election of directors is a fundamental right of share ownership and that shareholders should therefore have as much flexibility and choice as possible when exercising their right to elect directors. In order to achieve this, CP is using a white universal proxy,” CP chairman John Cleghorn said in a letter to shareholders on Tuesday.
“As CP is using a universal proxy containing all of the CP nominees, as well as any other nominees proposed by Pershing Square, there is no need to use any other form of proxy regardless of how you proposed to vote.”
On Monday, Pershing Square said retired Norfolk Southern Corp. vice-chairman Stephen Tobias has joined the slate of alternative director nominees that will be put to a shareholder vote at CP’s annual meeting May 17 in Calgary.
CP is backing an incumbent team of 15 directors, plus it’s recommending Mr. Ackman to be the 16th board member.
Last week, CP CEO Fred Green lashed out at Mr. Harrison’s “flawed” recovery plans that would interfere with an ongoing strategy to run longer and faster trains.
In addition to Mr. Ackman and his hedge fund partner Paul Hilal, the alternative slate comprises Mr. Tobias, Alberta Enterprise Corp. chairman Paul Haggis, corporate restructuring specialist Gary Colter, former Onex Corp. executive Anthony Melman and Rebecca MacDonald, executive chairwoman of Just Energy Group Inc.
Pershing Square acquired a 14.2-per-cent stake in CP last fall in a bid to revitalize an industry laggard that ranks as the least efficient among six major railways in North America.
In his letter, Mr. Cleghorn said CP has the right executives and directors already in place.
“We strongly recommend you vote for the CP director nominees, all of whom are highly qualified, engaged and informed business leaders who best serve the interests of all CP shareholders,” he said. “The board believes that replacing Fred Green with Hunter Harrison, as demanded by Pershing Square, would delay and damage CP’s value-generating plan and would undermine CP’s ongoing initiatives to increase volume and improve operations and profitability.”