OTTAWA — Last year’s breakup of Canadian Pacific Ltd. into five separate companies resulted in big payouts for executives at Canadian Pacific Railway Ltd., the Globe and Mail reports.
Robert Ritchie, president and chief executive officer of Calgary-based CPR, pocketed $8.6-million last year, including $5.5-million by exercising stock options and $1.7-million through a long-term incentive plan.
He will also receive another long-term incentive bonus this year worth as much as $1.7-million.
The four-year incentive plan was shortened by a year because of the breakup, according to the management proxy circular that was made available to shareholders yesterday.
“The cash payout is based upon measurable operational and financial targets at the end of the revised performance period adjusted for the impact” of the breakup, the circular said.
The breakup also allowed executives to cash in options in Canadian Pacific Ltd. early and helped boost the value of those shares. Mr. Ritchie is sitting on another $2.4-million in CPR stock options, some of which will not be exercisable for several years.
Ed Dodge, CPR’s chief operating officer, made $3.4-million in 2001, including $2.8-million by exercising stock options. He will also receive a long-term bonus this year of as much as $1-million.
Mike Waites, the railway’s chief financial officer, made $1.5-million in 2001, including $1-million by exercising stock options. His long-term bonus will be as much as $764,750 when it is awarded at the end of the year.
In October, Canadian Pacific Ltd. executed a “starburst” breakup, in which one parent was replaced by five independent businesses: PanCanadian Energy Corp., Fording Inc., Fairmont Hotels & Resorts Inc., CP Ships Ltd. and CPR.
CPR shares started trading independently on the Toronto Stock Exchange at $22.51 on Oct. 3. They rose 43 per cent to close at $32.10 at the end of the year and have since risen further to close yesterday up 53 cents at $34.90 on the Toronto Stock Exchange.