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TORONTO (Reuters) - The chief executive of Canadian Pacific railway has lost the support of two more big investors ahead of a crucial shareholder vote, pointing to victory for activist investor William Ackman in a bruising proxy battle.
The British Columbia Investment Management Corporation, one of CP's largest shareholders, said it will not vote for CP Chief Executive Fred Green or Chairman John Cleghorn.
The influential Canada Pension Plan Investment Board said it had voted for board members proposed by Ackman's Pershing Square Capital Management, withholding votes from all of the railway's current directors.
"We agree that CP's performance has not been satisfactory. We applaud the efforts of Pershing Square Capital Management but don't believe that a wholesale change of the board is required at this time," Bryan Thomson, BCIMC's vice president for equity investments, said of the fund's decision to vote for four of Pershing's seven nominees, including Ackman, and for nine of CP's 15 current board members.
BCIMC held roughly 1.44 percent of the railroad operator's outstanding shares as of March 31. The CPPIB held 0.2 percent.
Pershing, CP's largest shareholder with a 14.1 percent stake, wants to replace Green with Hunter Harrison, the former head of Canadian National Railway Co.
Ackman argues that new leadership is the only way to fix the weak operating performance of CP, which is Canada's No. 2 railroad. The company's board and management say recent data proves their current turnaround plan is working.
With the company's annual meeting scheduled for May 17, shareholders are choosing between Pershing's minority slate of dissident board nominees and the company's current directors, who back Green.
The news from the two investors came at the end of a week that seemed to secure Pershing's victory in the proxy fight.
The Ontario Teachers' Pension Fund, another major fund, said on Monday it would back Pershing.
Glass Lewis & Co on Wednesday followed two other proxy advisory firms, Institutional Shareholder Services and Egan-Jones, in recommending that shareholders vote for Pershing's nominee.
Ackman said on Tuesday that no last-minute compromise was possible.
($1 = $1.00 Canadian)
Reporting by Allison Martell; Editing by Peter Galloway and Janet Guttsman