Hunter Harrison, CEO of Canadian Pacific Railway Limited, speaks to the economic community at a business luncheon in Toronto, March 2, 2015. Following eight weeks of medical complications after surgery, the legendary workaholic will be handing more responsibility to his COO.MARK BLINCH/Reuters
Hunter Harrison is slowing down.
After eight weeks of struggling with medical complications following surgery on his legs, the legendary workaholic at the helm of Canadian Pacific Railway Ltd. says he plans to cut back his work hours, limit trips from his Connecticut home to the company's Calgary headquarters and hand more responsibility to his chief operating officer, Keith Creel.
"I can't go as hard as I used to," says Mr. Harrison, 71, a Memphis-born railroader who once described himself in an interview as a "mean and ugly" sheriff who worked all hours repairing broken railways. His aggressive calls for cost-cutting and route changes at Illinois Central Railroad, Canadian National Railway Co. and CP transformed the sleepy railways into top performers
"I have to understand that I have to do it a little differently. I'm not as young as I used to be," Mr. Harrison says in a telephone interview from Florida, where he is recovering from pneumonia and other medical issues after surgery in May to improve circulation in his legs.
Under doctor's orders to work shorter days, he says he will take more time off and adopt a healthier lifestyle. Healthier, he says with more than a trace of regret, means no more "ceremonial cigars," less wine and "eating fish I don't even like."
Despite the setbacks, he says he intends to honour his commitment to New York activist and CP shareholder Bill Ackman to remain as chief executive officer until the end of 2017. Mr. Ackman led a shareholder revolt in 2012 that put Mr. Harrison in charge and replaced most of CP's directors and executives.
Mr. Harrison says he expects to return to work full-time within the next three to four weeks and will work primarily from his home office in Connecticut. He is handing more duties to Mr. Creel, and CP is in the final stages of hiring a senior executive from a competitor to bolster the company's senior ranks. Mr. Harrison declined to identify the executive.
His recent hospitalization for pneumonia forced him to miss one of the more dramatic board meetings in CP's recent history. Two of the railway's directors – chairman Gary Colter and director Krystyna Hoeg – resigned Tuesday after what insiders described as a spirited boardroom dispute over their handling of the departure of another director, who resigned for health reasons.
According to a CP statement issued Tuesday, Mr. Colter and Ms. Hoeg, head of the board's governance committee, issued an incorrect news release – without the approval of other directors – about the timing of the resignation of director Stephen Tobias. The news release stated Mr. Tobias resigned June 30, when in fact he offered to exit July 3.
People familiar with the dispute said Mr. Colter and Ms. Hoeg incorrectly backdated Mr. Tobias's exit to ensure that CP's board would have a majority of Canadian directors at the end of the second quarter – so it would continue to qualify for a U.S. regulatory exemption as a Canadian issuer of public stock. After CP corrected the inaccurate news release, the company said it would become a U.S. issuer, forcing it to comply with stricter U.S. disclosure, insider trading and other reporting requirements.
Mr. Harrison says the boardroom showdown was an "unfortunate" culmination of recent "tensions" between board members, some of whom, he says, placed a priority on preserving CP's standing as a Canadian issuer.
"Some people got very irate about this issue," he says.
A spokesman for CP declined to comment, and Mr. Colter and Ms. Hoeg could not be reached for comment.
With files from Brent Jang