CP says some customers worried about Harrison as CEO

Tue Apr 3, 2012 3:40pm EDT
 
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(Reuters) - A number of Canadian Pacific Railway customers have expressed concerns about disruptions that would occur if Hunter Harrison was installed as its new chief executive, CP said on Tuesday.

However, CP, which is fighting off a plan by its biggest shareholder to replace its CEO with Harrison, said in a statement it is not including any "change-in-management" clauses in customer contracts.

Change-in-management provisions protect customers against possible disruptions to their business.

Harrison is the former CEO of Canadian National Railway, CP's biggest competitor. CP is Canada's second biggest railroad.

CP's biggest investor, U.S. hedge fund Pershing Square Capital Management, believes Harrison will be able to lead a turnaround of CP, which lags its North American peers on operating efficiency.

But CP's board has thrown its weight behind its CEO Fred Green.

Shareholders will vote on the future leadership of the company at CP's annual meeting on May 17.

CP's stock was 0.6 percent weaker on the Toronto Stock Exchange at C$76.31 on Tuesday afternoon. It was down less than the market.

(Reporting By Nicole Mordant in Vancouver; Editing by Janet Guttsman)