Bill Ackman: evaluation

Transcript context

…What was the most dramatic battle for the board that you have been a part of? The Canadian Pacific Proxy contest. Canadian Pacific was considered the most iconic company in Canada. It literally built the country because the rail that got built over Canada is what united the various provinces into a country. And then over time, because the railroad business is a pretty good business, they built a ton of hotels, they owned a lot of real estate, and it became this massive conglomerate, but it was horribly mismanaged for decades. By the time we got involved, it was by far the worst run railroad in North America. They had the lowest profit margins, they had the lowest growth rate. Every quarter management would make excuses, generally about the weather as to why they underperformed versus … And there there’s a direct competitor, a company called Canadian National, has a rail goes right across the country. And Canadian Pacific would constantly be complaining about the weather. And basically same country, same regions, the tracks weren’t that far apart. But it was a really important company and being on this board was like an honorary thing. And everyone on the board was an icon of Canada. The chairman of the Royal Bank of Canada, the head of the most important privately held grain company, an important collection of big time Canadian executives. Here we were, this is probably about 13 years ago, and still maybe a 44-year-old from New York, not a Canadian basically saying, “This is the worst run railroad North America.” And we bought 12% of the railroad at a really low price and we brought with us to our first meeting, the greatest railroader ever, a guy named Hunter Harrison who had turned around Canadian National. We’re like, “Okay, we’ve got a great asset. We’ve got the greatest railroad CEO of all time. He’s come out of retirement to step in and run the railroad.” And we brought him to the first meeting and they wouldn’t even meet with him, and they certainly weren’t going to consider hiring him. And that led us to a proxy contest. And this is where the engine starts churning to figure out how this contest can be won. What’s involved?…

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