TORONTO, May 9 (Reuters) - Two more proxy advisory firms backed activist investor William Ackman in his bid to shake up Canadian Pacific Railway Ltd, a further boost for Ackman's Pershing Square Capital Management in its proxy fight with Canada's No. 2 railroad.
The endorsements match a recent recommendation from Institutional Shareholder Services Inc, another leading proxy advisor, which also backed Pershing's slate for election to CP's board at its May 17 annual meeting.
Pershing and CP are locked in a proxy battle over who should lead CP. Pershing says CP CEO Fred Green should be replaced, ideally by former Canadian National Railway CEO Hunter Harrison. CP says Green has a turnaround plan for the railroad.
But in a note to clients, Glass Lewis & Co advised its clients to back P ershing Square's entire slate of seven nominees and to vote against re-electing CP Chairman John Cleghorn and Green as directors.
"We believe the company's serial underperformance from a total shareholder return perspective and its industry-worst operating performance require a far-reaching overhaul of the board and senior management" it said.
The proxy firms advise large institutional investors ahead of shareholder votes, and their reports can shift votes for or against management in proxy battles.
Egan-Jones took the same approach. "We believe that voting on the dissidents' ballot for the dissidents' nominees is in the best interest of the company and its shareholders," it said.
Earlier this week, Ontario Teachers' Pension Fund, a large Canadian Pacific shareholder, also said it would vote for Ackman's slate instead of the incumbent board.