The hedge fund manager Bill Ackman said Monday that he would wage a proxy battle to replace both the directors and the chief executive of the Canadian Pacific Railway after it rejected his plan to bring in a former rival to run the company.
Mr. Ackman, whose firm Pershing Square Capital Management is the largest shareholder in the railway, raised the specter of a proxy fight in a interview shortly after John E. Cleghorn, the chairman of Canadian Pacific, released an open letter to shareholders supporting Fred Green, the current chief executive, and his long-term plans for the company.
Last week, both sides publicly exchanged letters offering differing views of Canadian Pacific’s performance. Mr. Ackman criticized Mr. Green for allowing the railway’s expenses to remain relatively high in comparison with its operating revenues, a common measure financial performance measure for railroads.
To change that situation, Mr. Ackman is proposing to bring in E. Hunter Harrison, the former head of the Canadian National Railway to replace Mr. Green. Under Mr. Harrison, Canadian National became one of the most efficient large railroads in North America.
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