William Ackman’s slate of directors for Canadian Pacific Railway Ltd.’s board won support from the Ontario Teachers’ Pension Plan as he pushes to oust Chief Executive Officer Fred Green.
Ontario Teachers’ is voting for Ackman’s seven nominees and withholding votes for the rest of what will be a 16-member board, according to the pension plan’s website. It held 1.3 percent of the stock as of March 31 and was the 14th-biggest investor, based on data compiled by Bloomberg.
Ackman, whose Pershing Square Capital Management LP is Canadian Pacific’s biggest shareholder, has said his slate of directors will seek a leadership change to boost profitability at North America’s least-efficient major railroad. Canadian Pacific’s board is supporting Green, who became CEO in 2006.
Ontario Teachers’ announcement bolsters Ackman’s case after proxy advisory firm Institutional Shareholder Services Inc. recommended last week that investors vote for his slate.
An April survey of about 45 percent of the rail’s shareholders from Brendan Wood International showed that about 94 percent of those polled want change at the railroad, and 75 percent favor Ackman’s proposal to replace Green with Hunter Harrison, the former head of Canadian National Railway Co.
Operating costs rose to 80.1 percent of Canadian Pacific’s sales in the first quarter from 79.4 percent in the same period in 2006, a month before Green took the top job. That operating ratio was the highest of the seven largest North American railroads.
Canadian Pacific climbed 0.1 percent to C$74.49 at the close of trading in Toronto. The shares have gained 21 percent since Oct. 27, the day before Pershing Square disclosed its stake.