(The Canadian Press) TORONTO - The Ontario Teachers' Pension Plan is backing Pershing Square Capital Management's nominees to the Canadian Pacific Railway Ltd. (TSX: T.CP, Stock Forum) board of directors.
U.S. investment firm Pershing Square is seeking to replace CP chief executive Fred Green with Hunter Harrison, former head of rival railway Canadian National Railway Co. (TSX: T.CNR, Stock Forum), a move that Teachers' supports.
"CP has failed to persuade us that Mr. Harrison would be a liability for CP," Teachers' said in making its decision.
"We note CP's performance has been below its peers during Mr. Green's tenure as CEO and are not convinced that the most recent results provide irrefutable evidence that CP is performing better than its peers."
"We believe that CP's multi-year plan (MYP) is similar to those previously executed by Mr. Harrison and that a change in management would not imperil the success of executing the MYP (multi-year plan)."
Teachers' also said Pershing's seven nominees are in the best interests of the railway.
The railway's annual meeting is set for May 17.
Teachers said it became a shareholder in CP as of Dec. 31.
Trading at $75.11 this week, CP has a market cap of $12.84 billion, based on 170.9 million shares outstanding. The 51-week range is $79.29 and $46.01.