Canadian Pacific Railway Ltd. (CP) Chief Executive Officer Fred Green, targeted for dismissal by hedge- fund investor William Ackman, received no bonus last year as the carrier failed to meet its profit targets.
Green’s total compensation dropped to C$5.29 million ($5.29 million), Calgary-based Canadian Pacific said today in a regulatory filing. That was down from C$6.58 million in 2010, when he received an annual bonus of C$1.67 million, CP said.
Ackman, whose Pershing Square Capital Management LP is the railroad’s biggest shareholder, is pushing to oust Green and install retired Canadian National Railway Co. (CNR) CEO Hunter Harrison. Ackman plans a proxy battle at the May 17 annual meeting to elect six directors to the board, which backs Green.
Canadian Pacific said today it will recommend investors vote for Ackman as a director “so that a constructive board- level dialogue based on all the relevant facts and information could take place.” An earlier invitation to Ackman, 45, to join the board “remains open,” the company said.
Ackman didn’t immediately return an e-mail message seeking comment today. He offered himself as part of Pershing’s slate of nominees after declining Canadian Pacific’s offer to become a director late last year, saying in January that the terms would have stripped him of his independence in board decisions.
Canadian Pacific needs a management change after lagging behind North American peers on performance benchmarks since Green, 55, became CEO in 2006, Ackman said in February. That argument drew another rebuttal from Canadian Pacific today.
“The board strongly disagrees with Pershing Square’s demand that Canadian Pacific replace its CEO with Hunter Harrison,” the railroad said. “The board believes that Mr. Harrison is not the right leader for Canadian Pacific.”
Net income last year fell to C$570 million, or C$3.34 a share, Canadian Pacific said Jan. 26. That compares with profit of C$651 million, or C$3.85, in 2010.
Pershing Square, based in New York, held 14.2 percent of Canadian Pacific’s outstanding shares as of Feb. 22, according to data compiled by Bloomberg.
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