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According to a news item published by Toronto’s Globe and Mail on Dec. 30, Canadian Pacific board members are under mounting pressure from Pershing Square Capital Management L.P. to shake up top management. The hedge fund run by William Ackman, which has acquired a 14.2 percent stake in the Class I, plans to replace most board members unless they agree to oust CP President and Chief Executive Officer Fred Green and replace him with former CN President and CEO E. Hunter Harrison, who retired in 2009, the news item states.

However, CP Chairman John Cleghorn expressed concern about the media report and his desire to “set the record straight” in a letter sent to Ackman dated Jan. 3.

“We are troubled by the inaccuracies and mischaracterizations that have appeared in the media,” Cleghorn wrote. “Contrary to media reports … no member of CP’s board of directors has ‘expressed enthusiasm for Mr. Harrison and requested a meeting with him.’ Indeed, no invitation has been extended by us to Mr. Harrison, either directly or via Pershing Square.”

Board members believed they had established a constructive dialogue with Pershing Square officials, he said. As a prospective board member, Ackman “would be expected to work constructively” with fellow board members on CP’s behalf and in the interest of all shareholders, Cleghorn wrote.

The Class I is focused on maximizing shareholder value and executing its growth strategy, he said.

“We believe we will deliver an annual operating ratio in the low 70s in the next three years,” Cleghorn wrote. “CP has a strong management team and an independent board made up of directors with extensive experience in railroads, energy, natural resources, food and agriculture, law, government, banking and finance.”