3 May 2012

Canadian Pacific Responds to ISS Recommendation

Calgary Alberta - Canadian Pacific Railway Limited today responded to a recommendation issued by Institutional Shareholder Services (ISS) regarding the Company's annual meeting of shareholders to be held on 17 May 2012.
 
CP commented:
 
"We strongly believe that ISS reached the wrong conclusion in failing to recommend that shareholders vote in favour of all of CP's highly-qualified and experienced directors. The perfunctory analysis presented by ISS to justify its flawed recommendation to vote for all seven Pershing Square nominees is directly contradicted by the analysis of CP's efficiency presented by Oliver Wyman, highly qualified, independent railroad industry experts retained by CP's Board of Directors. We strongly recommend that shareholders vote FOR CP's director nominees by voting the WHITE universal proxy today.
 
The CP Board has significant breadth and depth of expertise and experience in both the railroad industry and other complementary fields and is the right Board to drive shareholder value by guiding the Company through the successful execution of the Multi-Year Plan. The entire Board of CP is holding Fred Green and the CP management team fully accountable for the success of this Plan.
 
CP's Board is unanimous in its belief that Pershing Square's demand that it replace the Company's CEO with Hunter Harrison would delay and damage CP's value-generating plan, and represents unwarranted risk to shareholder value at a critical time.
 
Pershing Square's nominees have failed to provide any strategic or operational plan that would lead to an improved Operating Ratio (OR), much less achieve the unprecedented and unrealistic rate of OR reduction Pershing Square has promised to shareholders.
 
CP is at a critical juncture. We urge shareholders to protect their investment and not risk CP's future by exposing CP to the disruption that electing all seven of Pershing Square's nominees would bring. Shareholders should vote FOR CP's highly-qualified director nominees on the WHITE universal proxy today."
 
CP recommends that shareholders use the WHITE universal proxy to select the 16 best directors to comprise the new Board. The 16 individuals with the most votes, out of the total of 22 individuals put forward by CP and Pershing Square, will comprise the Board elected at the annual meeting. Shareholders who wish to vote for some, but not all seven, of the Pershing Square nominees are encouraged to use the WHITE universal proxy.