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A Canadian Pacific Railway train makes its way through the Alberta Rockies in August of 2001. (ADRIAN WYLD/The Canadian Press)
A Canadian Pacific Railway train makes its way through the Alberta Rockies in August of 2001. (ADRIAN WYLD/The Canadian Press)

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ISS slams CPR for 'playing Whack-A-Mole' in C-suite Add to ...

These are stories Report on Business is following Thursday, May 3, 2012. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

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ISS backs activist Canadian Pacific Railway Ltd. hasn't lost the war yet, but it certainly suffered a humiliating defeat today in its pitched battle with an activist shareholder.

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Indeed, today's developments give Bill Ackman of Pershing Square Capital Management even more momentum to prevail when it comes down to a vote on May 17. It also adds pressure to the railway's directors to seriously attempt to strike a deal beforehand.

Mr. Ackman, who is now CP's biggest shareholder and has been pushing for a new CEO as well as other changes, won the support of an influential proxy adviser, The Globe and Mail's Jacquie McNish and Brent Jang report.

Institutional Shareholder Services Inc. recommended investors vote in favour of all seven dissident directors promoted by Mr. Ackman, saying he has put forth a compelling case of poor board oversight and lagging performance.

In the six years since Mr. Green was named CEO, the report said the company has changed its chief operating officer five times and replaced three chief financial officers.

Such turnover, the report said “is akin to playing Whack-A-Mole in the C-suite, and may say more about the abilities of the CEO and board than about any individual candidate. How, one might ask, is it possible to plan for the long term, much less execute on those plans, when succession planning in the executive suite looks more like crisis management?”

OSC sets conditions Canada's main market regulator will impose share ownership restrictions and require an independent board of directors as conditions of its approval of the takeover of TMX Group Inc.

The Ontario Securities Commission published its recognition order today for the proposed takeover of the owner of the Toronto Stock Exchange by Maple Group, a collection of financial services companies, The Globe and Mail's Janet McFarland reports.

The proposed rules, which follow months of review of the deal, are now open for public comment until June 4 before the OSC makes a final decision.

Maple Group said it would accept the conditions.

BCE profit jumps BCE Inc. today posted a 14-per-cent jump in first-quarter profit, citing growth in its media and wireless operations.

The Canadian telecommunications giant earned $574-million, or 74 cents a share, compared to $503-million or 67 cents a year earlier, The Globe and Mail's Rita Trichur reports.

"Our execution in the first quarter demonstrated a solid start to the year, highlighted by strong wireless performance, stabilizing business markets performance, continued competitive price discounting in residential wireline, and media results that delivered a strong contribution to earnings and cash flow," said chief financial officer Siim Vanaselja.

BCE also said it has now topped 3 million Internet customers.

Manulife profit climbs Buoyed by stronger stock markets and higher insurance sales in Asia and Canada, Manulife Financial Corp. today reported a sharp jump in first-quarter profit, though warned of a sizeable hit in the next quarter.

The Canadian-based insurance company's profit climbed to $1.2-billion or 66 cents a share, compared to $985-million or 54 cents a year earlier, The Globe and Mail's Tara Perkins writes. After accounting for one-time items, Manulife's profit was in line with what analysts expected.

"Our first quarter reflects strong markets, positive hedging results, 35-per-cent higher insurance sales, and stronger underlying earnings relative to the fourth quarter of 2011," said chief executive officer Donald Guloien.

Manulife warned of expected charges, including a hit of between $700-million and $800-million next quarter. due to updating interest rate assumptions.

GM profit slips General Motors Co. cited the U.S. recovery and strong demand in China for helping to pump up first-quarter profit, but said it was hurt by Europe's ongoing troubles.

The auto maker's profit slipped to $1-billion (U.S.) or 60 cents a share, diluted, from $3.2-billion or $1.77 a year earlier, though the latter included a hefty special gain and the former a special pension charge.

Revenue climbed to $37.8-billion, up by $1.6-billion, GM said.

"The U.S. economic recovery, record demand for GM vehicles in China and the global growth of the Chevrolet brand helped deliver solid earnings for General Motors," said chief executive officer Dan Akerson

"New products are starting to make a difference in South America, but Europe remains a work in progress."

Former RIM chiefs said to have held buyout talks Research In Motion Ltd. reportedly held talks with a U.S. private equity firm about the possibility of taking the BlackBerry maker private last year, but the discussions fell apart, Bloomberg News reports.

The discussions with Silver Lake, the news agency said, quoting an unidentified source, were held when Mike Lazaridis and Jim Balsillie were still running the Canadian tech icon.

The talks were only preliminary, but those at the table couldn't agree on the value of the company, which is no surprise given how the stock has tanked over the past year.

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