Rail Executive’s Leave Opens Door to Joining Harrison’s CSX PushBy
CP Rail veteran is only manager the departing CEO can recruit
RBC sees ‘high likelihood’ of Harrison taking role at CSX
The only Canadian Pacific Railway Ltd. executive who can be recruited by departing Chief Executive Officer Hunter Harrison is taking a leave of absence, opening the door to a potential reunion of the two men at another railroad.
Mark Wallace, the carrier’s chief of staff and a longtime Harrison confidant, will relinquish his functions at the close of business Friday, Canadian Pacific said in a U.S. regulatory filing. Wallace will be put on a paid leave of absence until March 31 unless he resigns, the Calgary-based company said.
Harrison is teaming up with activist investor Paul Hilal to target CSX Corp. for a management shakeup, Bloomberg News reported last week. As part of Harrison’s departure from Canadian Pacific, he agreed to a limited non-competition agreement that bars him from recruiting any manager of the company -- with the exception of Wallace.
There’s now a “high likelihood” of a friendly deal with CSX that would result in Harrison assuming a senior leadership role at the Jacksonville, Florida-based railroad, Walter Spracklin, an RBC Capital Markets analyst, said Friday in a note to clients.
Wallace and Marty Cej, a Canadian Pacific spokesman, declined to comment beyond the contents of the filing. Harrison didn’t respond to an e-mailed request for comment.
Starting in January 2003, Wallace spent three years as Harrison’s chief of staff at Canadian National Railway Co. when the Tennessee native was CEO.
If Wallace hasn’t resigned from Canadian Pacific by March 31, he will begin an unpaid leave, the company said. If he hasn’t resigned by the end of May, he can begin “good faith negotiations” about another leadership position at the company, Canadian Pacific said.