Canadian Manufacturing

CP Rail names replacement for CEO Hunter Harrison as it reports Q2 earnings

Canadian Pacific Railway announced Keith Creel will take the reins as the company's next CEO, beginning next July



PHOTO: CP

Canadian Pacific Railway’s CEO Hunter Harrison is headed for retirement as of June 30, 2017. PHOTO: CP

CALGARY—Canadian Pacific Railway announced July 20 that president and chief operating officer Keith Creel will succeed Hunter Harrison as CEO, beginning July 1, 2017.

The Calgary-based railway also said it has reached a three-year agreement with Harrison to stay on in a consulting role.

“I’ve demonstrated my trouble with retiring in the past, so being available to the board and the organization after my official retirement is exciting,” Harrison said in a statement.

“In four years we have gone from an industry laggard to an industry leader. I look forward to assisting Keith, the executive team and the board in any manner requested as they continue to write the CP story.”

Both men are railroad industry veterans, having held a number of senior positions including at CP’s rival, Montreal-based Canadian National.

The announcement came hours after Canadian Pacific issued a separate statement saying that one of its board of directors has resigned, days after he lost an appeal of gross negligence penalties for not reporting $18.85 million of taxable income from dividends.

Canadian Pacific says Anthony Melman, who also served as the chairman of its finance committee, has stepped down to assess the impact of the Tax Court of Canada decision earlier this month.

Judge Randall Babcock ruled that Melman had been “wilfully blind” to his accountants’ omission of the income in his 2007 tax return.

Melman joined the CP board in 2012 and has also been a member of its audit committee. He is a former managing director of Onex Corp. and a former senior vice-president of CIBC, according to documents filed with regulators.

Canadian Pacific’s announcements came as the company announced lower second-quarter revenue and earnings.

Its profit fell 16 per cent to $328 million from $390 million in the same period last year. On a per-share basis, net earnings were $2.15, down from $2.36. Revenue declined 12 per cent to $1.45 billion from $1.65 billion.

“Revenue challenges in the second quarter, as noted in our quarterly outlook release last month, included lower-than-anticipated bulk volumes, devastating wildfires in northern Alberta and a strengthening Canadian dollar,” Harrison said in a statement.

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