Canadian National Railway (CNI) “suspended the pension benefits of former Chief Executive Hunter Harrison and was seeking court approval to cancel them, ratcheting up pressure on the executive to end his pursuit of the top job at Canadian Pacific Railway Ltd (CP),” reports the Wall Street Journal. Bill Ackman, the activist investor whose hedge fund Pershing Square owns a 14.2% stake in CP, has been pushing to install Harrison as a replacement for CP’s current CEO Fred Green. CN said Monday that Harrison “breached and intends to breach his contractual undertakings to the company,” because of his interest in the Canadian Pacific position. Harrison’s lawyer, Gregory Joseph, called CN’s lawsuit “frivolous.”
Ackman’s efforts, to date, have been unsuccessful. CP Rail’s board has expressed their unanimous support for Green and filed open, and arguably heated letters to that effect. Now, “Ackman is seeking a proxy vote, which will take place at the company’s annual meeting May 17 in Calgary, to replace Canadian Pacific directors to achieve his goal,” writes the Wall Street Journal. “In a release late Monday, Canadian Pacific said Mr. Ackman’s nominees to the board are himself, Gary Colter, Paul Hilal, Rebecca MacDonald and Anthony Melman.” CP’s board “comprises 15 highly qualified directors, 13 of whom are independent,” said CP Rail Chairman John Cleghorn said. Cleghorn also said the company stands by an offer for Ackman to join the board so a “constructive board-level dialogue” can begin.