Was Ackman Really Needed To Shake Up Canadian Pacific Railway?
By Streetwise Blog:
By Tim Kildaze
Here’s a brainteaser for you: Because Canadian Pacific Railway Ltd. (CP) has underperformed its rivals for so long, did shareholders really need an activist to show them the light? Now that so many influential shareholders have lined up behind activist Bill Ackman, forcing CP chief executive officer Fred Green to step down and convincing a number of key directors that they had no chance of being re-elected, it’s pretty clear that CP never really had much of a leg to stand on. We’ve all seen the stats during this months-long proxy fight. When Mr. Ackman first bought in, CP’s operating ratio, which measures operating costs as a percentage of revenue, was around 82 per cent. Canadian National Railway Co.’s was 63 per cent. (Lower is better.) As for CP’s E3 plan – Execution Excellence for Efficiency – that involved running longer trains, renegotiating fuel contracts with freightComplete Story »