A new poll of shareholders of Canadian Pacific Railway Ltd. shows strong support for the dissidents who want a new chief executive officer and changes in the board of directors.
The survey, taken by consulting firm Brendan Wood International, found 91 per cent of shareholders want change in the company, and 73 per cent favour the moves proposed by Pershing Square Capital Management, which is leading a proxy battle against the incumbent board and management.
Pershing Square, a New York hedge fund led by shareholder activist Bill Ackman, wants to replace Canadian Pacific CEO Fred Green with former Canadian National Railway Co. CEO Hunter Harrison.
Pershing has also proposed six new directors for the CP board. A shareholder vote is scheduled for May 17 in Calgary.
The Brendan Wood survey was based on interviews with shareholders who represent about one-third of CP’s outstanding shares. The consultants talk to institutional shareholders on a regular basis as part of their work to glean intelligence for global corporations and investment banks.
The survey makes it clear that a very high proportion of shareholders want change in the company, said Stewart Borden, managing partner of Brendan Wood Canada. Still, he said, some shareholders want change at CP but aren’t certain that the Pershing Square proposals are the solution.
A spokesman for CP said: “The only vote that counts is at the annual meeting.”
Earlier polls by Brendan Wood have showed a very low level of investor confidence in the senior executives at CP, with the company’s management ranking near of bottom of the consulting firm’s transportation index.
Mr. Borden said his organization is monitoring the efforts of the CP board to win over shareholder opinion. He noted that two CP directors spoke out earlier this week, in a conference call with a BMO Nesbitt Burns analyst. They said the company is moving ahead with a multiyear plan to improve its performance, and replacing senior management would set the company back on that progress significantly.
This shows there is a recognition within CP that the board needs to be more aggressive in communicating to shareholders, Mr. Borden said. And with weeks to go before the vote, there is time for CP to come out swinging harder, he added. “CP has quite a slate of capable savvy business executives, and I don't think we seen the full thrust of their effort.”
But Mr. Ackman’s side has also been campaigning hard. On Tuesday, Mr. Harrison said in a television interview on Business News Network that he has a strong track record in improving the performance of railways he has run, and that he would draw on his contacts in the business across North America to fill spots at CP.