Canadian Pacific boss Hunter Harrison earned $49M in 2012
$18.6 M in ‘make-whole payments’ after giving up share units at CN
MONTREAL Canadian Pacific Railway Ltd. paid Hunter Harrison $49.2 million last year after recruiting him as chief executive officer following a proxy fight by activist investor William Ackman.
Harrison’s compensation for 2012 included a pension guarantee valued at $16 million and $18.6 million in “make-whole payments” to compensate for restricted share units that Harrison, once the chief of rival Canadian National Railway Co., forfeited when he agreed to join the company, Canadian Pacific said Friday in its proxy filing.
Harrison, 68, took over in June after Ackman’s Pershing Square Capital Management LP won a proxy fight to oust Harrison’s predecessor. He is trying to reduce the company’s operating ratio, an industry benchmark that compares expenses to sales and is the worst of the large North American railroads.
The new CEO “has nearly 50 years of railroad experience and leadership,” Canadian Pacific said in the filing. “CP is now benefiting from his strong track record of service reliability, efficient asset utilization, strategic capital expenditure and his focus on safety and the development of people.”
Canadian Pacific has surged about 77 per cent since June 27, the day before Harrison took over, topping the 12 per cent return by Canada’s benchmark Standard & Poor’s/TSX Composite Index. The stock trades at an 81 per cent premium to Canadian National, on a price-to-earnings basis.
Harrison’s annual base salary has been set at $2.1 million, an amount that includes compensation for $1.5 million in lost yearly Canadian National pension payments.
The new CEO also received $1.8 million in stock awards, $10 million in options awards, $1.3 million in annual incentives, a special housing allowance of $46,341 and use of company aircraft valued at $277,200, the filing shows.
Canadian Pacific said it “prefers that the CEO use the company aircraft for personal as well as business use.”
Fred Green, who resigned before the May 17 shareholder meeting, had total compensation of $8.8 million in 2012, the filing shows. The amount includes about $4 million in severance pay, about $537,000 in salary and $3.5 million in share and options awards.
Canadian Pacific’s next shareholder meeting will take place May 1 in Toronto, the Calgary-based company said in the filing.