Pershing Square Tightens Grip on CP Vote.
CP Stonewall May Signal an End to the Era of Invisible Boards
26th April, 2012 – Brendan Wood releases results of investor poll effective as at April 17th, 2012.
Shareholders . . . . . . . . . . . . . . . 17Apr12 . 16Mar12 . 23Feb12
Supporting Pershing: . . . . . . . . . . . . . . 75% – 73% – 72%
Supporting a Change But Not Harrison: . 19% – 18% – 14%
Supporting CP Board . . . . . . . . . . . . . . 06% – 09% – 14%
. . . . . . . . . . . . . . . . . . . . . . . % institutional shareholders polled
With double the number of shareholders reporting since the last poll, the results continue to favour Pershing’s initiative. These results are based upon responses of +/-45% of the voting shares.
The figures represent a shareholder protest of potentially overwhelming proportions. Quoted in response to the Brendan Wood poll earlier this year a Canadian Pacific Railway spokesperson commented that “The only vote that counts is at the annual meeting”. Investors, however, seem hard pressed to accept CP board’s near dismissal of expressions of shareholder dissatisfaction.
Shareholder Confidence rankings of the CP board dropped from 28th place to 41st of the 46 names on Brendan Wood’s Global Transportation Index, as investors hold CP’s board accountable for both the strategy and management performance at the company. Fred Green, CEO ranked 45th of 46 CEO’s in the latest poll. Hunter Harrison, nominated by shareholders as a TopGun CEO for his performance at Canadian National Railway, is Pershing’s senior management candidate. The TopGun CEO designation is awarded to +/- 8% of CEO’s of large cap companies worldwide.
CP’s board members remained somewhat aloof during the Pershing campaign. CP board members have neither mounted a vigorous defence nor an effective counter-attack to Pershing’s initiative. Notwithstanding modest appearances by CP directors, the absence of a truly passionate battle for their seats weighed in on the poll. Investors, having registered their own discontent, anticipated a far more spirited campaign from the well paid board of their company. CP’s spokesperson, as quoted, further diminished the relevance of the poll saying “We were approached to buy consulting services from Brendan Wood but decided not to spend our shareholders’ money”. This contradiction, given the dire news of the poll, was not lost on the reader nor on Brendan Wood who responded, “Well before these words parted CP’s lips, I had personally delivered a full report of the poll to all CP Directors and Officers including Corporate Counsel and Investor Relations at no charge whatsoever to CP. Under the circumstances, it was delivered to CP’s board members in the shareholder interest. Frankly, we hoped CP’s board would be inspired to hit the campaign trail, connect with investors and intensify the debate. The report was also sent to CP shareholders to whom BWI has its first duty. Our ‘Voice of the Shareholder’ Directors Reports are offered by subscription, to the boards of all BWI Index companies” said Mr. Wood.
Recent events in the capital markets underpin the rising frequency of investor-led challenges to boards. The Brendan Wood Shareholder data underlines that the world’s highest rated boards are accompanied by TopGun Strategy and Management. The global data affirms that boards have the power to drive large companies to excellence, whether they use it or not. Exceptional companies typically have TopGun boards. “Most boards on the Brendan Wood Index, although large signature global companies, have been insufficiently familiar to shareholders. This is changing very fast. If a board remains aloof and heaven forbid arrogant, modern shareholders are now fully cognizant of their power to make that change” said Mr. Wood.
“CP shareholders are greatly interested in the company and what other major shareholders think and feel about the organization and the Pershing initiative. I have had fulsome discussions with a great many investors. We are at loss to understand why CP’s board and/or management did not come in and have a coffee and talk about the concerns of their shareholders in the poll” said Stewart Borden, Managing Partner, Brendan Wood Canada.
Brendan Wood and partners worldwide debriefs of investors continue non-stop throughout the year. There are now 2,000 companies on BWI’s Shareholder Confidence Index, a thousand of which are already the subject of quarterly reports, the remainder, as well as a Global Rising Star group, coming on stream in the months ahead. The firm plans to pay special attention as the votes are counted at CP’s upcoming AGM.
CP Investor Poll – Addendum
We have received a few inquiries from journalists who are unfamiliar with the Brendan Wood International model. Formed in 1970, Brendan Wood International finances all of its intelligence programs globally through partner capital. The firm does not conduct research on-demand for any client. These two disciplines eliminate any manipulation. Brendan Wood and partners conduct several thousand debriefs each year, compile the results and make reports available to all capital markets competitors and shareholders.
The Shareholder Confidence reports referred to in today’s BWI’s release concerning CP’s proxy debate are derived from the Global Transportation Sector data financed exclusively by Brendan Wood International. Fees for access to BWI Shareholder Confidence data are $12,000 quarterly. Any investor or management can subscribe.
BWI does not act for or represent either existing management or any shareholder whatsoever in the debate. BWI’s role is to collect data responsibly and govern itself objectively with the shareholder’s interest in mind. Shareholders have trusted BWI to do nothing less for 40 years.
Stewart Borden, Partner, Brendan Wood International
Henry S. Brenzel, Panel Manager, Brendan Wood International
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