Keith Creel takes helm of CP; E. Hunter Harrison retires

Written by Kyra Senese, Managing Editor
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Keith Creel, left, will begin serving as CEO of Canadian Pacific immediately as Hunter Harrison, right, takes leave for vacation through Jan. 31, 2017, at which time he will retire from CP.
CP

Canadian Pacific Railway Limited (CP) has announced the appointment of Keith Creel as the company’s president and CEO effective Jan. 31. The change follows E. Hunter Harrison's decision to retire from the railroad.  

 

CP says Harrison is taking vacation leave effective immediately through Jan. 31. Creel will take on the CEO’s duties throughout this timeframe. 

“Hunter has made enormous contributions to CP, and we are forever grateful for his years of service,” said Andrew F. Reardon, chairman of the board. “We have a tremendous CEO-in-waiting in Keith Creel. Keith and his team are ready to formally take the reins.”

The Class 1 says Harrison discussed with CP’s board his retirement from the railroad and possible arrangements that would allow him to seek opportunities involving other Class 1 railroads. After negotiations, review of independent legal advice and deliberation, the railroad says its special committee recommended to the board that CP and Harrison enter a separation agreement.

“Leaving CP is bittersweet,” Harrison said. “I have had a wonderful experience and depart with many friends and with full confidence in Keith’s ability to build on the great success we have enjoyed.”

CP agreed to terms of the separation agreement outlining a limited waiver of Harrison’s non-competition obligations. Representatives say Harrison has agreed to terminate all his roles with CP, relinquishing all benefits and perquisites he is permitted to receive from CP in the future, including his pension.

Harrison also agreed to surrender for cancellation all of his vested and unvested equity awards, excluding a segment of his vested options he was allotted upon joining CP in June 2012.

The total benefits and awards Harrison will forfeit is valued at about CA$118 million (US$88.5 million), with the value of the equity awards surrendered determined based on their in-the-money value relative to CP’s current trading price of shares.

CP and Harrison’s previously-established consulting agreement will be disregarded. Harrison will not offer CP any consulting or related services following his retirement. CP also reinforced Harrison’s non-solicitation obligations regarding senior CP employees, and he has agreed to sell all of his CP shares by May 31, 2017. CP says the railroad will not have any role in Harrison’s future pursuits.

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