TORONTO, May 3 (Reuters) - Influential advisory firm Institutional Shareholder Services Inc advised clients on Thursday to back dissident investor Pershing Square’s entire slate of seven nominees for election to Canadian Pacific Railway Ltd’s board of directors.
The ISS endorsement of the Pershing slate deals a major blow to CP’s hopes of quashing the hedge fund’s revolt. Pershing, led by well known activist investor William Ackman, contends that CP has been mismanaged. Its nominees are competing directly against CP’s own slate.
Shareholders are set to vote on the rival slates at CP’s annual meeting on May 17.
Pershing, CP’s largest shareholder with a 14.1 percent stake, wants CP Chief Executive Fred Green to be replaced by Hunter Harrison, the former head of Canadian National Railway .
“The dissidents have demonstrated a compelling case that poor board oversight has allowed the company’s performance to drift further and further below both its peers and its potential over at least half a decade, it seems clear that change on the board is needed,” ISS said in its report.
The advisory firm also recommended that its clients withhold support for CP’s incumbent chairman, John Cleghorn, and CEO Fred Green.