The chair of Canada’s second largest railway assured shareholders last week that the company has a multi-year plan aimed at increasing volumes, expanding rail network capacity, controlling costs and boosting profitability.
Canadian Pacific Railway chair John Cleghorn said the company’s new plan has been endorsed by the CPR’s board of directors and will result in greater efficiency and reduced operating ratios, which are defined as a ratio of operating expenses to revenues.
In an open letter to shareholders issued Jan. 9, Cleghorn said CPR’s board fully supports the railway’s president and chief executive officer, Fred Green, and will continue to work with Green and other senior managers to ensure that the company meets its financial targets.
Read Also
Ag in Motion innovation awards showcase top 2025 ag technology
The 2025 Ag in Motion Innovation Awards celebrated winners across five categories: agronomics, agtech, business solutions, environmental sustainability and equipment.
“The board is working closely with management and monitoring the company’s performance,” Cleghorn wrote.
“This plan has been specifically designed to generate the best possible operational and financial results from CP’s unique assets and circumstances.”
Cleghorn’s letter was issued in response to criticism by American fund manager William Ackman, who manages Pershing Square Capital Management.
Ackman’s Pershing Square holds a 14.2 percent share in CPR.
Earlier this month, Ackman threatened to take action aimed at replacing several members of CPR’s board and ousting Green as the company’s CEO.
Ackman proposed that the board replace Green with former Canadian National Railway executive Hunter Harrison, who is credited with improving efficiency at CN, CPR’s main rival, and setting a new performance standard for the North American rail industry.
CN, Canada’s largest rail company, has since advised CPR against hiring Harrison, suggesting that he has a contractual commitment that prohibits him from working for CPR.
Ackman also said last week that he would lobby CPR shareholders to support a plan aimed at replacing several directors on CPR’s current board.
Cleghorn said CPR directors take all suggestions from shareholders seriously.
However, suggestions to replace Green are not in the company’s best interest.
“Having considered Pershing Square’s demand, the board came to the unanimous conclusion that replacing the company’s chief executive officer, and thereby jeopardizing the successful execution of the multi-year plan, is not in the best interests of CP or its shareholders,” Cleghorn wrote.
