CP Rail president and CEO Keith Creel holds the door for shareholders at the company's annual meeting in Calgary on May 10, 2018.Jeff McIntosh/The Canadian Press
Canadian Pacific Railway Ltd. is giving CEO Keith Creel a special stock option grant it values at US$8.4-million in recognition of its just-announced deal to acquire Kansas City Southern.
CP says the contract amendment is designed to keep the 52-year-old Mr. Creel at CP until at least 2026. Board chair Isabelle Courville said in a Sunday news release the amendment “solidifies Keith’s role in overseeing and leading the successful integration of CP with Kansas City Southern and all of the benefits that transaction will bring.”
Calgary-based CP said in a securities filing Monday it will reduce Mr. Creel’s performance-based pay by US$2.1-million in each of the next four years to offset the special award. The options will “vest,” or become usable, in four annual blocks starting in 2022. No language in the filing suggests the merger must be successfully completed for the options to vest.
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Mr. Creel joined CP in 2010 under former chief executive Hunter Harrison, who was brought in to cut costs and revive the moribund railway. Mr. Creel became CEO in 2017.
In 2020, Mr. Creel’s pay climbed to $16.82-million from $15.15-million in the prior year. His cash bonus rose nearly $500,000, to $3.44-million, and CP paid him stock and option awards it valued at nearly $11-million. His salary was $1,601,097.
CP also gives the Florida-based Mr. Creel a Calgary housing allowance and the use of a corporate jet to visit his family. In the COVID-19 pandemic year of 2020, that extra compensation – which also includes financial planning assistance and a club membership – fell to $242,948 from $554,930.
In its annual proxy statement to shareholders filed last week, CP said it blew past financial goals set for awarding compensation. Its “corporate performance factor” – based on a blend of measures for cost management, profits and safety – was 172 per cent, with 100 per cent representing at-target performance.
CP says since Mr. Creel became CEO in 2017, its share price has increased 150 per cent. It also says it has been the safest Class 1 railway in North America for 15 consecutive years as measured by U.S. federal standards.
At the end of 2020, Mr. Creel had $113.5-million in unexercised CP stock options based on the stock’s year-end closing price, the company said in its disclosures.
In its proxy, CP also says in 2020, “our heroic front-line essential workers rose to the challenge to support the North American economy and continue to provide goods and services at a critical time in the world’s history.” To recognize them, it gave each unionized employee a one-time gross payment of $1,500.
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