Calgary Alberta - The February announcement from Canadian Pacific Railway that chief financial officer Bart Demosky would depart the company, just over a year after his arrival, was curious, I think it's fair to say.
 
The company's recent proxy circular (mailed to shareholders late last month) did little to sate the curiosity.
 
Actually, it may raise more questions, rather than provide answers.
 
Let's review, first, what is known:  On 11 Feb 2015 CP said Mr. Demosky, who had joined the company 13 months prior from Suncor Energy, would depart at the end of May.
 
In a statement, Mr. Demosky said:  "After careful consideration and much discussion with (chief executive) Hunter (Harrison), the board of directors and my family, I have decided to step down."
 
He said the decision "comes at the right time for me to focus on my family and other opportunities."
 
He is the second CFO hired by Mr. Harrison to leave the company in the past three years.
 
One analyst suggested Mr. Demosky has his eye on a CEO job and didn't have "a clear path" to that role at CP.
 
But, with all due respect, that doesn't seem particularly obvious:  When Mr. Demosky joined CP at the age of 47, the company had already hired 45-year-old Keith Creel, seen as a protege of Mr. Harrison's, as president and chief operating officer.
 
It would seem the path to the CP CEO job was blocked before Mr. Demosky said yes to the company's top finance role.
 
(Although the recent extension of Mr. Harrison's contract by a year could have been a sign that Mr. Creel needed more time to get ready for the top job.)
 
Nonetheless, simply moving from one CFO job to another could be seen as a promotion.
 
Mr. Demosky was a senior vice-president at Suncor, he got an executive vice-president title at CP.
 
His new salary of $600,000 was $100,000 more than his previous pay.
 
At Suncor, Mr. Demosky had some stock options that were "out of the money" and unable to be used, while other options had expired because Suncor hadn't hit the performance criteria required for the executives to keep them.
 
At CP, he would receive a whole new batch of stock awards.
 
It's not to say, however, that his Suncor compensation package was woefully inadequate, because CP was quite generous in encouraging him to leave.
 
According to CP's proxy, it gave Mr. Demosky $4.7-million in stock awards and $470,000 in cash "to make Mr. Demosky whole with respect to certain deferred compensation opportunities that were forfeited as a result of leaving his former employer."
 
CP also agreed to "supplemental retirement benefits" equal to the gains in his pension had he stayed at Suncor.
 
In essence, he didn't have to give up much of anything to leave Suncor.
 
Here, though, is the mystery:  It seems like he has to give up an awful lot to leave CP.
 
The company says the supplemental pension deal vests after 18 months, and "should he resign within 18 months Mr. Demosky's pension benefits would be forfeited."
 
(By my count, 31 May 2015 is 17 months and four days after his hire date of 28 Dec 2013.)
 
Also, "should Mr. Demosky voluntarily resign from the company prior to 30 Nov 2016," CP says, "he would have to repay, on a prorated basis, amounts awarded in respect of deferred compensation forgone as a result of leaving his former employer."
 
By my estimation, that means he'd have to give back roughly half of the $5.17 million in "make-whole" payments he received in late 2013.
 
Is CP holding him to those requirements, or has there been a better deal negotiated by Mr. Demosky to ease his departure?
 
I can only guess.
 
And this is where we get to the problem:  Although Mr. Demosky resigned the month before the proxy was mailed to shareholders, details of any sort of severance arrangement are absent from the circular.
 
That, apparently, is because the circular covers 2014 pay, and any sort of deal would have been struck in 2015.
 
CP spokesman Martin Cej said in an e-mail 8 Apr 2015 that CP's proxy is "fully compliant by law," and "Mr. Demosky's compensation is a private matter between him and CP.
 
All required disclosure with respect to Mr. Demosky's 2015 compensation will be provided, as required, in the 2016 circular."
 
(Mr. Cej also declined my request to speak directly to Mr. Demosky.)
 
Here, then, is a weakness in disclosure requirements.
 
I could argue that the resignation of a top executive officer, and the terms of the severance, belong in a material change report, available to shareholders within days of the event.
 
But, clearly, neither CP nor other major Canadian companies agree, as evidenced by the retirement arrangements made for two top executives at CIBC, struck last year but only revealed in this year's proxy.
 
Perhaps Mr. Demosky's departure is merely a matter of a cultural issue with the hard-charging Mr. Harrison, rather than anything more troubling, and a nice severance was arranged to smooth things over.
 
Absent any disclosure, however, shareholders of CP are left to wonder why Mr. Demosky would walk away from so much, so soon.
 
And they apparently will have to wonder for another whole year.

David Milstead.