##### Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   FORM 10-K/A AMENDMENT NO. 1    ☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR  ☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from
                 to                 . Commission File Number 001-01342   Canadian Pacific Railway Limited (Exact
name of registrant as specified in its charter)    Canada

98-0355078(State or Other Jurisdiction of
Incorporation or Organization)

(IRS Employer
Identification No.)7550 Ogden Dale Road S.E.,
Calgary, Alberta, Canada

T2C 4X9(Address of Principal Executive Offices)

(Zip Code) Registrants Telephone Number, Including Area Code: (403)
319-7000 Securities registered pursuant to Section 12(b) of the Act:  Title of each class

Name of each exchange on which
registeredCommon Shares, without par value

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐ Indicate by check
mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.   Yes  ☐    No  ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ☒ No ☐ Indicate by check mark whether the
registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit such
files).    Yes  ☒    No  ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§232.405 of this chapter)
is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.☒ Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated
filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. (Check one):  Large accelerated filer

☒

Accelerated filer

☐Non-accelerated filer

☐

Smaller reporting company

☐Emerging growth company

☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes  ☐    No  ☒ As of June 30, 2018, the last business day of the registrants most recently completed second fiscal quarter, the aggregate market value of the voting stock
held by non-affiliates of the registrant, in U.S. dollars, was $26,091,991,353, based on the closing sales price per share as reported by the New York Stock Exchange on such date. As of the close of business on February 13, 2019, there were 140,041,483 shares of the registrants Common Stock outstanding.




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##### Table of Contents

EXPLANATORY NOTE Canadian Pacific Railway Limited, a corporation incorporated under the Canada Business Corporations Act (the Company), qualifies as a foreign private
issuer in the U.S. for purposes of the Securities Exchange Act of 1934, as amended (the Exchange Act). Although as a foreign private issuer the Company is not required to do so, the Company currently continues to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the Securities and Exchange Commission
(SEC) instead of filing the reports available to foreign private issuers. The Company prepares and files a management proxy circular and related material under Canadian requirements. As the Companys management proxy circular is not
filed pursuant to Regulation 14A, the Company may not incorporate by reference information required by Part III of its Form 10-K from its management proxy circular. The Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (2018 Form 10-K) on February 15, 2019. In reliance upon and as permitted by Instruction G(3) to Form 10-K, the Company is filing this Amendment No. 1 on Form 10-K/A in order to include in the 2018 Form 10-K the Part III information not previously included in the 2018 Form 10-K. No attempt has been made in this Amendment No. 1 on Form 10-K/A to modify or update the other disclosures presented in the
2018 Form 10-K. This Amendment No. 1 on Form 10-K/A does not reflect events occurring after the filing of the 2018 Form
10-K. Accordingly, this Amendment No. 1 on Form 10-K/A should be read in conjunction with the 2018 Form 10-K and
the Companys other filings with the SEC. In this Amendment No. 1 on Form 10-K/A, we also refer to Canadian
Pacific Railway Limited as Canadian Pacific, we, us, our, our corporation, or the corporation. References to GAAP mean generally accepted accounting principles in
the United States. All references to our websites and to our Canadian management proxy circular filed with the SEC on March 16, 2019 as Exhibit 99.1 to
our Current Report on Form 8-K (the Circular) contained herein do not constitute incorporation by reference of information contained on such websites and the Circular and such information should
not be considered part of this document.




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##### Table of Contents

CANADIAN PACIFIC RAILWAY LIMITED FORM 10-K/A TABLE OF CONTENTS  PART IIIItem 10

Directors, Executive Officers and Corporate Governance


1Item 11

Executive Compensation


6Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


53Item 13

Certain Relationships and Related Transactions, and Director Independence


54Item 14

Principal Accounting Fees and Services


54PART IVItem 15

Exhibits, Financial Statement Schedules


56Item 16

Form 10-K Summary


56Signatures


57




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##### Table of Contents

PART III  ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors  Director profiles
 As announced in December of 2018, Andrew F. Reardon will be retiring from CPs Board of
Directors as of CPs 2019 Annual General Meeting.  All of the remaining nine nominated
directors are qualified and experienced, and have agreed to serve on our Board.  All are CP
shareholders and must meet our director share ownership requirements within five years of joining the Board. 
Share ownership listed here is as at March 15, 2019 and includes shares directors beneficially own or control, or hold directly or indirectly. Share ownership
includes holdings under the Directors Deferred Share Unit (DDSU) plan.
 Andrew F. Reardon Chairman of the BoardLOGO

Independent Age:73
Director since: May 1, 2013
Residence:Marco Island, Florida, U.S.A.
2018 voting results: 94.4% for  DIRECTOR SKILLS
AND QUALIFICATIONS  Chairman of the Board since July 20,
2015. Brings expertise in the following areas: senior executive leadership, accounting & financial literacy, environment, health & safety, executive compensation & human resources, transportation, investment management, governance,
government & regulatory affairs, risk management, sales & marketing, and strategic oversight.  OVERALL 2018 ATTENDANCEMeeting AttendanceBoard

6 of 6


100%Audit

8 of 8


100%Governance

4 of 4


100%Finance

3 of 3


100%Compensation

6 of 6


100% BUSINESS EXPERIENCE  

Chairman and Chief Executive Officer (2001 to 2008), President and Chief Executive Officer from 2001 to 2008, and Vice-President, Law and Human Resources (1992 to 2000) of TTX Company, the leading railcar leasing
company in North America 

Previously Senior Vice-President, Law and Administration for Illinois Central Railroad PUBLIC
COMPANY BOARD EXPERIENCE  

Appvion Inc. (2007 to 2015) (member of the Audit Committee, Compensation Committee and Chair of the Governance Committee) OTHER EXPERIENCE Other Boards  

TTX Company (2001 to 2008) 

Other rail industry boards: Terminal Railroad Association of St. Louis and Peoria and Pekin Union Railway 

Presidential appointee to the Railroad Retirement Board (1990 to 1992) 

Barriger Railroad Library (St. Louis) Board of Trustees (Board member (1998 to present), and President Emeritus (2009 to 2012) Other experience  

Officer, United States Navy (1967 to 1971) EDUCATION  

Bachelors degree, University of Notre Dame 

Juris Doctor degree, University of Cincinnati 

Masters degree in Taxation, Washington University Law School SHARE OWNERSHIP Shares: 453 DDSUs: 12,677 Options: 0 Meets share ownership requirements
 Isabelle Courville Chair DesignateLOGO

Independent Age:56
Director since: May 1, 2013
Residence:Rosemère, Québec, Canada 2018
voting results: 92.8%for  DIRECTOR SKILLS
AND QUALIFICATIONS  Brings expertise in the following areas:
senior executive leadership, accounting & financial literacy, environment, health & safety, executive compensation & human resources, transportation, governance, government & regulatory affairs, risk management, sales &
marketing, and strategic oversight.  OVERALL 2018
ATTENDANCE




100%Meeting AttendanceBoard Chairman of the Board since July 20,
2015. Brings extensive experience in executive management, law, corporate governance and the rail industry.

6 of 6


100%Governance

4 of 4


100%Compensation (Chair)

6 of 6


100% BUSINESS EXPERIENCE  

President of Hydro-Québec Distribution and Hydro-Québec TransÉnergie (2007 to 2013) 

20 years of experience in the Canadian telecommunications industry, including President of Bell Canadas Enterprise Group (2003 to 2006) and President and Chief Executive Officer of Bell Nordiq Group (2002 to 2003) PUBLIC COMPANY BOARD EXPERIENCE  

SNC Lavalin (2017 to present) (Chair of Human Resources Committee and member of Governance and Ethics Committee) 

Laurentian Bank of Canada (2007 to present; tenure to conclude April 2019) (Chair of the Board and member of Human Resources and Corporate Governance Committee) 

Veolia Environment S.A. (2015 to present) (member of Accounts and Audit Committee, Nominating Committee and the Research, Innovation and Sustainable Development Committee) 

Gecina S.A. (2016 to April 2017) (member of Audit Committee) 

TVA Group (2013 to 2016) (member of Human Resources Committee) OTHER EXPERIENCE Other Boards  

Institute of Corporate Directors (ICD) (2013 to 2017) 

Institute for Governance of Private and Public Organizations (IGOPP) (2016 to present) (member of Human Resources Committee) EDUCATION  

Bachelors degree in Engineering Physics, École Polytechnique de Montréal 

Bachelors degree in Civil Law, McGill University 

Doctorate Honoris Causa, University of Montréal SHARE OWNERSHIP Shares: 900 DDSUs: 7,052 Options: 0 Meets share ownership requirements
   1




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The
Hon. John Baird, P.C.LOGO

Independent Age:49 Director since:
May 14, 2015 Residence:Toronto,
Ontario, Canada 2018 voting results:
94.3%for  DIRECTOR SKILLS
AND QUALIFICATIONS  Brings expertise in the following areas:
senior executive leadership, environment, health & safety, transportation, governance, government & regulatory affairs, risk management and strategic oversight.  OVERALL 2018
ATTENDANCE




94%Meeting AttendanceBoard

6 of 6


100%Governance

3 of 4


75%Compensation

5 of 6


100% BUSINESS EXPERIENCE  

Senior Advisor at the law firm of Bennett Jones LLP , Hatch Ltd. (an engineering firm) and Eurasia Group (a geopolitical risk consultancy) (2015 to present) 

Member of the International Advisory Board, Barrick Gold Corporation (2015 to present) 

President of Grantham Finchley Consulting Inc. (2015 to present) PUBLIC COMPANY BOARD EXPERIENCE  

Canfor Corporation and Canfor Pulp Products Inc. (2016 to present) (member of Environmental, Health and Safety Committee; Capital Expenditure Committee and Corporate Governance Committee) OTHER EXPERIENCE Other Boards 

FWD Group Ltd./FWD Ltd. (2015 to present) (member of Audit Committee and Risk Management and Actuarial Committee) 

PineBridge Investments (2015 to present) 

Friends of Israel Initiative (2015 to present) (member of the Board) Other experience 

Served as Canadian Foreign Minister, Minister of Transport and Infrastructure, Minister of the Environment, and President of the Treasury Board during his three terms as a Member of the Canadian Parliament (2006 to
2015) 

Appointed to the Privy Council in 2006 

Former Minister of Community and Social Services and Minister of Energy in Ontario provincial legislature 

Senior Advisor to Community Living Ontario, an organization that supports individuals with developmental disabilities 

Advisory Board member to Princes Charities Canada, the charitable office of His Royal Highness The Prince of Wales EDUCATION  

Honours Bachelor of Arts (Political Studies), Queens University SHARE OWNERSHIP Shares: 0 DDSUs: 4,384 Options: 0 Has until May 2020 to meet the share ownership requirements
 Keith E. CreelLOGO

Not Independent Age:50
Director since: May 14, 2015
Residence:Wellington, Florida, U.S.A.
2018 voting results: 99.8%for  DIRECTOR SKILLS
AND QUALIFICATIONS  President and Chief Executive Officer of CP
since January 31, 2017. Brings expertise in the following areas: senior executive leadership, environment, health & safety, executive compensation & human resources, transportation, governance, government, regulatory & legal affairs,
risk management, sales & marketing and strategic oversight.  OVERALL 2018
ATTENDANCE




100%Meeting AttendanceBoard

6 of 6


100% BUSINESS EXPERIENCE  

President and Chief Executive Officer of CP (2017 to present, President and Chief Operating Officer of CP (February 2013 to January 2017) 

Named Railroad Innovator for 2014 by Progressive Railroading in recognition of his leadership at CP 

Executive Vice-President and Chief Operating Officer of Canadian National Railway Company (2010 to 2013) 

Other positions at CN included Executive Vice- President, Operations, Senior Vice-President Eastern Region, Senior Vice-President Western Region, and Vice-President of CNs Prairie division (2002 to 2010) 

Trainmaster and director of corridor operations at Illinois Central Railway prior to its merger with CN in 1999 

Superintendent and general manager at Grand Trunk Western Railroad (1999 to 2002) 

Began his railroad career in 1992 as an intermodal ramp manager at Burlington Northern Railway in Birmingham, Alabama OTHER EXPERIENCE Other Boards 

Member of the Board of TTX Company (2014 to present) 

Representative on American Association of Railroads Other experience 

Commissioned officer in the U.S. Army and served in the Persian Gulf War in Saudi Arabia EDUCATION  

Bachelor of Science in Marketing, Jacksonville State University 

Advanced Management Program, Harvard Business School SHARE OWNERSHIP Shares: 3,059 DSUs: 31,606 Options: 716,671 Meets executive share ownership requirements (see page 30)
 Gillian (Jill) H. DenhamLOGO

Independent Age:58
Director since: September 6, 2016
Residence:Toronto, Ontario, Canada 2018 voting
results: 98.9%for  DIRECTOR SKILLS
AND QUALIFICATIONS  Brings expertise in the following areas:
senior executive leadership, accounting & financial literacy, executive compensation & human resources, investment management, governance, risk management, sales & marketing and strategic oversight.  OVERALL 2018
ATTENDANCE




100%Meeting AttendanceBoard

6 of 6


100%Audit

8 of 8


100%Finance

3 of 3


100% BUSINESS EXPERIENCE  

Vice Chair Retail Markets for CIBC (2001 to 2005) 

Previously held senior positions at Wood Gundy and CIBC, including: Managing Director Head of Commercial Banking and E-Commerce; 

President of Merchant Banking/Private Equity and Managing Director Head responsible for the banks European Operations PUBLIC COMPANY BOARD EXPERIENCE  

Morneau Shepell Inc. (2008 to present) (Chair of the Board and Chair of the Governance and Nominating Committee) 

National Bank of Canada (2010 to present) (member of Human Resources Committee) 

Kinaxis Inc. (2016 to present) (Chair of the Human Resources Committee and member of the Audit Committee and Nominating and Governance Committee) 

Markit Ltd. (2014 to 2016) 

Penn West Petroleum (2012 to 2016) 

Calloway Real Estate Investment Trust (2011 to 2012) OTHER EXPERIENCE Other Boards 

Munich Reinsurance Company of Canada (Chair) (2012 to present) 

Temple Insurance Company (Chair) (2012 to present) 

Centre for Addiction and Mental Health (CAMH) (2015 to present) EDUCATION  

Honours Business Administration (HBA) degree, Ivey Business School, Western University 

MBA, Harvard Business School SHARE OWNERSHIP Shares: 0 DDSUs: 2,613 Options: 0 Has until September 2021 to meet the share ownership requirements
   2




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Rebecca MacDonaldLOGO

Independent Age:65
Director since: May 17, 2012
Residence:North York, Ontario, Canada 2018 voting
results: 94.1%for  DIRECTOR SKILLS
AND QUALIFICATIONS  Brings expertise in the following areas:
senior executive leadership, accounting & financial literacy, executive compensation & human resources, investment management, governance, risk management, sales & marketing and strategic oversight.  OVERALL 2018
ATTENDANCE




100%Meeting AttendanceBoard

6 of 6


100%Audit

4 of 4


100%Compensation

3 of 3


100%Governance (Chair)

4 of 4


100% BUSINESS EXPERIENCE  

Founder and current Executive Chair of Just Energy Group Inc., a Toronto-based independent marketer of deregulated gas and electricity 

President and Chief Executive Officer of Just Energy (2001 to 2007) 

Founded Energy Savings Income Fund in 1997, another company which aggregated customers in the deregulation of the U.K. natural gas industry 

Founded Energy Marketing Inc. in 1989 PUBLIC COMPANY BOARD EXPERIENCE  

Just Energy Group Inc. (2001 to present) (Executive Chair since 2007) OTHER EXPERIENCE Other Boards 

Horatio Alger Association in both Canada and the United States Other experience 

Founded the Rebecca MacDonald Centre for Arthritis and Autoimmune Disease at Mount Sinai Hospital in Toronto 

Previously Vice-Chair of the Board of Directors of Mount Sinai Hospital 

Previously a member of the Board of Governors of the Royal Ontario Museum EDUCATION  

Honorary LLD degree, University of Victoria SHARE OWNERSHIP Shares: 0 DDSUs: 10,627 Options: 0 Meets share ownership requirements
 Edward L. MonserLOGO

Independent Age:68
Director since: December 17, 2018
Residence:St. Louis, Missouri, U.S.A. 2018 voting
results: N/A  DIRECTOR SKILLS
AND QUALIFICATIONS 
Brings expertise in the following areas: senior executive leadership, accounting & financial literacy, environment,
health & safety, executive compensation & human resources, governance, risk management, transportation, sales & marketing and strategic oversight.  OVERALL 2018
ATTENDANCE




100%Meeting AttendanceBoard

1 of 1


100%Audit

1 of 1


100%Compensation

1 of 1


100% BUSINESS EXPERIENCE  

President (2010-2018) and Chief Operating Officer (2001-2015) of Emerson Electric Co. 

President (1996-2001) and Executive Vice President (1991-1996) of Rosemount Inc. 

Member of the Advisory Economic Development Board for Chinas Guangdong Province 

Member and current Vice-Chairman of the U.S.-India Strategic Partnership Forum PUBLIC COMPANY
BOARD EXPERIENCE  

Air Products & Chemicals Corporation (Chair of Management Development and Compensation Committee and member of Audit Committee) OTHER EXPERIENCE Other Boards 

Ranken Technical College Other experience 

Past Board member and past Vice-Chairman of the U.S.-China Business Council. EDUCATION  

Bachelors degree, Engineering, Illinois Institute of Technology 

Bachelors degree, Education, Eastern Michigan University 

Executive MBA, Stanford University Graduate School of Business SHARE OWNERSHIP Shares: 0 DDSUs: 46 Options: 0 Has until December 2023 to meet the share ownership requirements
 Matthew H. PaullLOGO

Independent Age:67
Director since: January 26, 2016
Residence:Willmette, Illinois, U.S.A. 2018 voting
results: 95.4%for  DIRECTOR SKILLS
AND QUALIFICATIONS  Brings expertise in the following areas:
senior executive leadership, accounting & financial literacy, investment management, governance, risk management and strategic oversight.  OVERALL 2018
ATTENDANCE




100%Meeting AttendanceBoard

6 of 6


100%Finance (Chair)

3 of 3


100%Compensation

6 of 6


100% BUSINESS EXPERIENCE  

Senior Executive Vice-President and Chief Financial Officer of McDonalds Corporation (2001 until his retirement in 2008) 

Before joining McDonalds in 1993, was a partner at Ernst & Young where he managed a variety of financial practices during his 18-year career and consulted with many
leading multinational corporations PUBLIC COMPANY BOARD EXPERIENCE  

Chipotle Mexican Grill Inc. (2016 to present) (member of Compensation Committee) 

Air Products & Chemicals Corporation (2013 to present) (Chair of Audit Committee and member of Corporate Governance and Nominating Committee and Executive Committee) 

Best Buy Co. (2003 to 2013) (lead independent director and chair of Finance Committee) 

WMS Industries Inc. (2012 to 2013) 

KapStone Paper and Packaging Corporation (2010 to 2018) OTHER EXPERIENCE Other Boards 

Pershing Square Capital Management, L.P. (2008 to present) (member of Advisory Board) EDUCATION  

Masters degree in Accounting, University of Illinois 

Bachelors degree, University of Illinois SHARE OWNERSHIP Shares: 3,000 DDSUs: 4,658 Options: 0 Meets share ownership requirements.
   3




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Jane PeverettLOGO

Independent Age:60
Director since: December 13, 2016
Residence:West Vancouver, British Columbia, Canada 2018 voting
results: 99.3%for  DIRECTOR SKILLS
AND QUALIFICATIONS  Brings expertise in the following areas:
senior executive leadership, accounting & financial literacy, environment, health & safety, executive compensation & human resources, governance, government, regulatory affairs & legal, risk management and strategic oversight.  OVERALL 2018
ATTENDANCE




100%Meeting AttendanceBoard

6 of 6


100%Audit (Chair)

8 of 8


100%Finance

3 of 3


100% BUSINESS EXPERIENCE  

President & Chief Executive Officer of BC Transmission Corporation (electrical transmission) (2005 to 2009) 

Vice-President, Corporate Services and Chief Financial Officer of BC Transmission Corporation (2003 to 2005) 

President of Union Gas Limited (a natural gas storage, transmission and distribution company) (2002 to 2003) 

Other positions at Union Gas Limited: President & Chief Executive Officer (2001 to 2002); Senior Vice-President Sales & Marketing (2000 to 2001) and Chief Financial Officer (1999 to 2000) PUBLIC COMPANY BOARD EXPERIENCE  

CIBC (2009 to present) (Chair of Audit Committee) 

Northwest Natural Gas Company (2007 to present) (member of Organization and Executive Compensation Committee and Public Affairs and Environmental Policy Committee) 

Capital Power Corporation (2019 to present) (Member of Corporate Governance, Compensation and Nominating Committee and Health, Safety and Environment Committee) 

Encana Corp. (2003 to 2017) 

Postmedia Network Canada Corp. (2013 to 2016) 

HydroOne Limited (2015 to 2018) OTHER EXPERIENCE Other Boards 

British Columbia Institute of Corporate Directors Executive Committee EDUCATION  

Bachelor of Commerce degree, McMaster University 

Master of Business Administration degree, Queens University 

Certified Management Accountant 

A Fellow of the Society of Management Accountants 

Holds the ICD.D designation from the Institute of Corporate Directors SHARE OWNERSHIP Shares: 0 DDSUs: 2,535 Options: 0 Has until January 2021 to meet the share ownership requirements
 Gordon T. TraftonLOGO

Independent Age:65
Director since: January 1, 2017
Residence:Naperville, Illinois, U.S.A. 2018 voting
results: 94.4%forDIRECTOR SKILLS AND QUALIFICATIONS 
Brings expertise in the following areas: senior executive leadership,
environment, health & safety, executive compensation & human resources, transportation, governance, government, regulatory affairs & legal, risk management, sales & marketing and strategic oversight.OVERALL 2018
ATTENDANCE



100%Meeting AttendanceBoard

6 of 6

100%Audit

4 of 4

100%Compensation

3 of 3

100%Governance

4 of 4

100%BUSINESS EXPERIENCE
   Consultant, Brigadier Consulting
(2013)   Special Advisor to the CN leadership team (2009 to his retirement in 2010)
  Senior Vice-President Strategic Acquisitions and Integration, CN (2003 to 2009)
  Senior Vice-President, Southern Region, CN (2003 to 2009)
  held a number of leadership positions with Illinois Central Railroad and Burlington Northern Railroad
 OTHER EXPERIENCE
 Other Boards
  Leeds School of Business Board of Alumni and Friends, University of Colorado Boulder
 EDUCATION
   Bachelor of Science, Transportation
Management from the Leeds School of Business, University of Colorado Boulder  SHARE OWNERSHIP  Shares: 0
DDSUs: 2,555 Options: 0
 Has until January 2022 to meet the share ownership requirements
 Notes: Other than as
disclosed below, none of the nominated directors is, or has been in the last 10 years:  (a)
a director, chief executive officer or chief financial officer of a company that:  

was subject to a cease trade or similar order or an order that denied the issuer access to any exemptions under securities legislation for over 30 consecutive days, that was issued while the proposed director was acting
in that capacity, or  

was subject to a cease trade or similar order or an order that denied the issuer access to an exemption under securities legislation for over 30 consecutive days, that was issued after the proposed director ceased to be
a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in that capacity  (b)
a director or executive officer of a company that, while that proposed director was acting in that capacity, or within a
year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a
receiver, receiver manager or trustee appointed to hold its assets,  (c)
become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or
instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold their assets.  (d)
subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities
regulatory authority or has entered into a settlement agreement with as securities commission. Ms. Denham served as a director of Penn West
Petroleum Ltd. (now Obsidian Energy Ltd.) from June 2012 to June 2016, which was subject to cease trade orders on its securities following the July 2014 announcement of the review of it accounting practices and restatement of its financial
statements. Those cease trade orders ended on September 23, 2014. Ms. Peverett was a director of Postmedia Network Canada Corp. (Postmedia) from April 2013 to
January 2016. On October 5, 2016, Postmedia completed a recapitalization transaction under a court-approved plan of arrangement under the Canada Business
Corporations Act. Approximately US$268.6 million of debt was exchanged for shares that represented approximately 98% of the outstanding shares at that time. Postmedia repaid, extended and amended the terms of its outstanding debt obligations.
   4




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##### Table of Contents

Executive Officers The
information regarding executive officers is included in Part I of our 2018 Form 10-K under Executive Officers of the Registrant, following Item 4. Mine Safety Disclosures. Section 16(a) Beneficial Ownership Reporting Compliance As of
June 30, 2017, Section 16(a) of the Exchange Act no longer applied to us because we qualified as a foreign private issuer under U.S. securities laws. Our officers and directors are required to file reports of equity ownership and changes
of ownership with the Canadian Securities Administrators and do not file such reports under the Exchange Act. Code of Business Ethics Our code of business ethics sets out our expectations for conduct. It covers confidentiality, protecting our assets, avoiding conflicts of interest, fair dealing with
third parties, compliance with laws, rules and regulations, as well as reporting any illegal or unethical behaviour, among other things. The code applies to everyone at CP and our subsidiaries: directors, officers, employees (unionized and non-unionized) and contractors who do work for us. Directors, officers and non-union
employees must sign an acknowledgement every year that they have read, understood and agree to comply with the code. Directors must also confirm annually that they have complied with the code. The code is part of the terms and conditions of
employment for non-union employees, and contractors must agree to follow principles of standards of business conduct consistent with those set out in our code as part of the terms of engagement. We also have a supplemental code of ethics for the CEO and senior financial officers which sets out our longstanding principles of conduct for these senior roles. A copy of the code of business ethics and the code of ethics for the CEO and senior financial officers, along with any amendments, are posted on our website
(investor.cpr.ca/governance). Only the Board or Governance Committee (Audit Committee in the case of the CEO and senior financial officers) can waive an aspect of the code. Any waivers are posted on our website. None were granted in 2018. Corporate Governance CP has a strong governance culture and we have
adopted many leading policies and practices. As a U.S. and Canadian listed company, our corporate governance practices comply with or exceed the practices outlined by the Canadian Securities Administrators (CSA) in National Policy 58-201 Corporate Governance Guidelines and the Toronto Stock Exchange (TSX), the Securities and Exchange Commission (SEC) and New York Stock Exchange (NYSE). We regularly review our policies and practices and make changes as appropriate, so that we stay at the forefront of good governance as standards and guidelines
continue to evolve in Canada and the United States. The Board and the Governance Committee are responsible for developing our approach to corporate governance.
This includes annual reviews of the corporate governance principles and guidelines which were established by the Board, as well as the terms of reference for the Board and each of the four Board committees. CPs corporate governance principles and guidelines are available on our website (investor.cpr.ca/governance).  5




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##### Table of Contents

CPs Audit Committee has been established in accordance with Section 3(a)(58)(A) the Exchange Act and NYSE
standards and CSA National Instrument 52-110. The current members of the Audit Committee are Jane Peverett (chair), Jill Denham, Rebecca MacDonald, Edward Monser, Andrew Reardon and Gordon Trafton, all of whom
are independent. All members of the Audit Committee are financially literate as required by the NYSE and CSA. Ms. Peverett and Mr. Reardon have been determined to be audit committee financial experts as defined by
the SEC. If significant corporate governance differences between CPs corporate governance practices and Item 303A of the NYSE arise, they will be disclosed
on our website (investor.cpr.ca/governance).  ITEM 11.
EXECUTIVE COMPENSATION As a foreign private issuer in the United States, we are deemed to comply with this Item if we provide information required by Items 6.B and 6.E.2 of Form 20-F, with more detailed information provided if otherwise made publicly available or required to be disclosed in Canada. We have provided information required by Items 6.B and 6.E.2 of Form 20-F in the Circular. As a foreign private issuer in the U.S., we are not required to disclose executive compensation according to the requirements of Regulation S-K that
apply to U.S. domestic issuers, and we are otherwise not required to adhere to the U.S. requirements relative to certain other proxy disclosures and requirements. Our executive compensation disclosure complies with Canadian requirements, which are,
in most respects, substantially similar to the U.S. rules. We generally attempt to comply with the spirit of the U.S. proxy rules when possible and to the extent that they do not conflict, in whole or in part, with required Canadian corporate or
securities requirements or disclosure. All dollar amounts included in this Item 11 are in Canadian dollars, unless otherwise expressly stated to be in U.S.
dollars. Compensation Committee Interlocks and Insider Participation There were no reportable interlocks or insider participation affecting the Companys Management Resources and Compensation Committee during the year ended
December 31, 2018. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board or our Management Resources and
Compensation Committee. Compensation Committee Report The Management
Resources and Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this annual report on Form 10-K/A with management of the Company and, based on such review
and discussion, the Management Resources and Compensation Committee recommended to the Board that the information set forth under Compensation Discussion and Analysis below be included in this annual report on Form 10-K/A. Respectfully submitted, Management Resources and Compensation Committee Isabelle Courville (Chair) John Baird Edward Monser Matthew Paull Andrew Reardon  6




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##### Table of Contents

LOGO 2.3 EXECUTIVE COMPENSATION Our executive compensation program is designed to pay for performance, and to align managements interests with our business strategy and the interests of our
shareholders. The next section describes our compensation program and explains the 2018 compensation decisions for our NEOs: 

Keith E. Creel, President and Chief Executive Officer 

Nadeem S. Velani, Executive Vice-President and Chief Financial Officer 

Robert A. Johnson, Executive Vice-President Operations 

John K. Brooks, Senior Vice-President and Chief Marketing Officer 

Laird J. Pitz, Senior Vice-President and Chief Risk Officer The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on its review, the Compensation Committee
recommended to the full Board that the Compensation Discussion and Analysis be included in this proxy circular. Where to find it  Compensation discussion and analysis

8Our approach to executive compensation

8Compensation governance

10Compensation program

152018 executive compensation

16Executive profiles

26Share performance and cost of management

39Executive compensation details

40Summary compensation table

40Incentive plan awards

43Retirement plans

47Termination and change in control

49  7




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##### Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS Our approach to executive compensation We believe in the importance of paying for performance and aligning managements interests with those of our shareholders. Our executive compensation program supports our railroad-focused culture, and is closely linked to the critical metrics that drive the achievement of our strategic
plan without taking on undue risk, and is designed to create long-term sustainable value for our shareholders. We have five key performance drivers designed to
focus us on our goal of being the best railroad company in North America:  1.
Provide customers with industry-leading rail service  2.
Control costs  3.
Optimize our assets  4.
Remain a leader in rail safety  5.
Develop our people As disclosed last year in the proxy circular, we implemented several changes to our compensation program in 2017. These changes were the result of an extensive
shareholder engagement program and review of executive compensation by the Compensation Committee, the Board and our human resources group. We did not make any further changes to the structure of our compensation plans in 2018. Compensation mix Attracting and retaining high
calibre executives is key to our long-term success. We believe strong performance should yield significant rewards. Our executive compensation includes fixed and
variable (at-risk) pay and the proportion of at-risk pay increases by level. Executives earn more if we perform well, and less when performance is not as strong. A
significant portion of executive pay is tied to the value of our shares, aligning with shareholder interests. We require our executives to own CP equity and our share ownership guidelines increase by executive level (see page 10). Variable cash compensation is more focused on corporate results for executives (75% of target) than for other employees (50% of target) who have more emphasis placed
on individual and departmental goals. This supports our view that the short-term incentive plan (STIP) should be tied to overall corporate performance and the
areas of our business that each employee influences directly. The table below shows the pay mix for our current named executives based on their total target
compensation.  LOGO   8




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##### Table of Contents

Benchmarking In 2018, we reviewed and updated, with input from our compensation advisors, our compensation comparator group. Since the last detailed review of our comparator group
in 2013, our market value and our positioning has changed substantially. Our amended comparator group now consists of six Class 1 Railroad peers as well as 12 capital-intensive Canadian companies. For certain positions within the organization,
we apply a heavier weighting to Class 1 Railroad peers; however, we consistently review alignment and compensation practices against the whole group. Our peer group is as follows:  BNSF Railway Company

BCE Inc.Canadian National Railway Company

GoldCorp Inc.CSX Corporation

Fortis Inc.Kansas City Southern

TransCanada CorporationNorfolk Southern Corporation

Telus CorporationUnion Pacific Corporation

Rogers Communications Inc.Cenovus Energy Inc.

Barrick Gold CorporationEnbridge Inc.

Kinross Gold CorporationImperial Oil Limited

Suncor Energy Inc. Compensation pays out over time   LOGO Salary fixed pay, set annually Short-term incentive cash bonus paid out in February 2019 based on 2018 corporate and individual performance
Long-term incentive (stock options) equity-based incentive granted in January 2018, vests over four years and expires after seven years and realized value depends on our share price 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Variable pay includes short- and long-term incentive awards to facilitate annual and longer-term performance and align with shareholder interests. Incentive awards are cash and equity-based. Equity-based awards vest at the end of three years for performance share units and over four years for stock options. Stock
options expire at the end of seven years. The Compensation Committee ensures the performance objectives for the incentive plans align directly with our strategic
plan, which is reviewed and approved by the Board.  9




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##### Table of Contents

Executives are CP shareholders We require executives and senior management employees to own equity in the company so they have a stake in our future success. Share ownership requirements are set as a
multiple of base salary and increase by level. Executives must satisfy the requirement within five years of being appointed to their position and can meet the requirements by holding common shares or deferred share units (DSUs). The CEO must
maintain the ownership level of six times his base salary for one year after he retires or leaves CP. Once executives have met their initial shareholding requirements, they are required to maintain compliance, which is reported annually to the
Compensation Committee. DSUs are redeemed for cash no earlier than six months after the executive retires or leaves the company or until the end of the following
calendar year for Canadian executives. Payment to U.S. executives who participate in the DSU plan is made after the six-month waiting period to be in compliance with U.S. tax regulations. The table below shows the ownership requirement by level, which applied to 83 executives and senior management employees in 2018.  Ownership requirement
(as a multiple of base salary)CEO


6xExecutive
Vice-President


3xSenior Vice-President


2xVice-President


1.5 to 2xSenior management


1x Mr. Creel, Mr. Johnson and Mr. Pitz have met their ownership requirement. Mr. Velani and Mr. Brooks are
expected to meet their requirement within the five-year period following their appointment. You can read about each named executives share ownership in the profiles beginning on page 26. Compensation governance Disciplined decision-making process Executive
compensation decisions involve management, the Compensation Committee and the Board. The Compensation Committee also receives advice and support from an external consultant from time to time.   LOGO DECISION-MAKING PROCESS 1 Management makes recommendations to the compensation committee Management: reviews market data reviews compensation
survey data analyzes company performance proposes corporate and individual performance objectives to the committee for the coming year 2 The Committee works with a consultant and makes compensation recommendations to the board The Committee:
recommends the corporate performance targets and weightings for the incentive plans reviews the corporate performance results for the incentive plans reviews individual performance receives independent advice from its external consultant recommends
the annual and long-term incentive awards to the Board 3 The Board has final approval The Board: reviews corporate and individual performance decides whether to use discretion approves compensation for the CEO and other named executives approves all
grants of equity compensation awards sets performance objectives for the following year The Board has final approval on all matters relating to executive
compensation. It can also use its discretion to adjust pay decisions as appropriate.  10




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##### Table of Contents

Qualified and experienced Compensation Committee The Compensation Committee is responsible for our compensation philosophy, strategy and program design. The Compensation Committee consists of five independent
directors. The Compensation Committee has the relevant skills, background and experience for carrying out its duties. The table below shows the key skills and
experience of each member:  Human Resources/
compensation/
succession planning


CEO/senior
management


Governanceand policydevelopment


Transportationindustry


Riskmanagement


Engagement(shareholdersand others)Isabelle Courville
(Committee Chair)

✓



✓



✓



✓



✓



✓John Baird





✓



✓



✓



✓



✓Andrew Reardon
(Chair of the Board)

✓



✓



✓



✓



✓



✓Matthew Paull





✓



✓







✓



✓Edward Monser

✓



✓



✓



✓



✓



✓ Compensation Committee members also have specific human resources and compensation-related experience, including: 

direct responsibility for executive compensation matters 

membership on other human resources committees 

compensation plan design and administration, compensation decision-making and understanding the Boards role in the
oversight of these practices 

understanding the principles and practices related to leadership development, talent management, succession planning and
employment contracts 

engagement with investors on compensation issues 

oversight of financial analysis related to compensation plan design and practices 

oversight of labour matters and a unionized workforce 

pension benefit oversight 

recruitment of senior executives The Compensation Committee has no interlocks or insider participation. None of the members were employed by or had any relationship with CP during 2018 requiring
disclosure under Item 404 or Item 407(e)(4) of Regulation S-K of the Exchange Act. You can read about the background and experience of each member in the director profiles beginning on page 1. Independent advice The Compensation Committee
and management retain separate independent executive compensation advisors to avoid any conflicts of interest:  Committee advisor

Management advisor   the Compensation Committee retained Kingsdale Advisors in 2018 as an independent
compensation advisor    the Compensation Committee ended their engagement with Meridian Compensation
Partners LLC (Meridian) in 2017    the Compensation Committee approves all compensation
related fees and work performed by the independent compensation advisor

   management engages Willis Towers Watson to provide market survey data and advice
relating to executive compensation The next table shows the fees paid to Meridian in 2017, Willis Towers Watson in 2017 and 2018 and Kingsdale Advisors in 2018.  2018





2017Kingsdale


Willis Towers Watson





Meridian


Willis Towers WatsonExecutive compensation-related fees

$
78,750


$
233,309






$
50,751


$
78,923Other fees

$
111,254


$
2,150,258







-


$
1,975,629Total fees

$
190,004


$
2,383,567






$
50,751


$
2,054,552   11




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##### Table of Contents

Fees paid In 2018, the
Board retained Kingsdale Advisors to provide independent advisory services related to governance trends and specific governance items, and compensation design. $78,750 was paid to Kingsdale Advisors for advisory fees provided to the Board. The total
governance and executive compensation fees represent 41% of the $190,004 paid in total to Kingsdale Advisors for all services provided to CP, including proxy solicitation and shareholder advisory services. In 2018, $233,309 was paid to Willis Towers Watson for executive compensation advisory fees provided to management. The total executive compensation fees represent 10%
of the $2,383,567 paid in total fees in 2018 to Willis Towers Watson for all services provided to management including actuarial and pension consulting, corporate risk and insurance broking services. In 2017 and 2018, Willis Towers Watson also
advised management on actuarial and pension consulting, corporate risk and insurance broking services as well as compensation. The higher expenses for Willis
Towers Watson in 2018 reflects additional compensation analysis and advisory work on behalf of management. Compensation risk Effective risk management is integral to achieving our business strategies and to our long-term success. The Board believes that our executive compensation program should not increase our risk profile. The Compensation Committee is responsible for overseeing compensation
risk. It reviews the executive compensation program, incentive plan design and our policies and practices to make sure they encourage the right decisions and actions to reward performance and align with shareholder interests. Incentive plan targets are linked to our corporate objectives and our corporate risk profile. The Compensation Committee believes that our approach to goal setting,
establishing performance measures and targets and evaluating performance results helps mitigate risk-taking that could reward poor judgment by executives or have a negative effect on shareholder value. All of the Compensation Committee members other than Mr. Paull and Mr. Monser are also members of the Governance Committee. Mr. Reardon and
Mr. Paull are also members of the Finance Committee as well, Mr. Reardon and Mr. Monser are members of the Audit Committee. This cross-membership strengthens risk oversight because it gives the directors a broader perspective of risk
oversight and a deeper understanding of our enterprise risks. Regular risk review The Compensation Committee conducts a comprehensive compensation risk review approximately every two years to make sure that we have identified the compensation risks
and have appropriate measures in place to mitigate those risks. An independent consultant assists the Compensation Committee with the review, which includes looking at: 

the targets for the short-term incentive and performance share unit plan, anticipated payout levels and the risks
associated with achieving target performance 

the design of the long-term incentive awards, which reward sustainable financial and operating performance 

the compensation program, policies and practices to ensure alignment with our enterprise risk management practices The last review was completed at the end of 2016 in conjunction with all the changes that were being proposed in 2017 to our compensation plans.
Based on the findings of the review, the Compensation Committee concluded that our compensation program, policies and practices are not reasonably likely to have an adverse effect on our business or the company overall. As we did not make any
material changes to our compensation plans this year, we did not undergo a risk assessment in 2018.  12




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##### Table of Contents

Managing compensation risk We mitigate risk in three ways:  1. Plan design

 we use a mix of fixed
and variable (at-risk) compensation and a significant proportion is at-risk pay
 short- and long-term incentive plans have specific performance measures that are closely aligned with the
achievement of our business strategy and performance required to achieve results in accordance with guidance provided to the market
 the payout curve for the STIP is designed asymmetrically to reflect the significant stretch in target
performance  the payout under the STIP is capped and not guaranteed, and the Compensation Committee has
discretion to reduce the awards  the long-term incentive plan has overlapping vesting periods to address
longer-term risks and maintain executives exposure to the risks of their decision-making through unvested share-based awards2. Policies

 we promote an ethical culture and everyone is subject
to a code of business ethics  we have share ownership requirements for executives and senior management so they
have a stake in our future success  we have a disclosure and insider trading and reporting policy to protect
our interests and ensure high business standards and appropriate conduct  our anti-hedging policy prohibits
directors, officers and employees from hedging our shares and share-based awards  our anti-pledging policy
prohibits directors and senior officers from holding our shares in a margin account or otherwise pledging them as security
 we also have a policy that prohibits employees from forward selling shares that may be delivered on the future
exercise of stock options, or otherwise monetizing their option awards, other than through exercising the options and subsequently selling the shares through a public venue or the companys cashless exercise option
 our clawback policy allows us to recoup incentive pay from current and former senior executives as appropriate
(see next page)  DSUs held by the CEO and executives are not settled for cash until at least six months after
leaving the company  our whistleblower policy applies to all employees and prohibits retaliation against anyone
who makes a complaint acting in good faith3. Mitigation
measures

 senior executive roles have a significant portion of
their compensation deferred  we must achieve a specific threshold of operating income, otherwise no short-term
incentive awards are granted  financial performance is verified by our external auditor (by the completion of
an annual financial statement audit) before the Board makes any decisions about short-term incentive  the
Compensation Committee adopted principles for adjusting payout under the short-term incentive plan, and provides them to the Board as part of their review of the Compensation Committees recommendations and performance overall
 environmental principles are fundamental to how we achieve our financial and operational objectives, and the
Compensation Committee takes them into account when exercising discretion and determining the short-term incentive awards
 all long-term incentive eligible employees are subject to two-year non-compete, non-solicit covenants should they leave CP
 safety is considered as part of individual performance under the short-term incentive for the CEO and executives
in operations roles in addition to being a specific STIP measure  we regularly benchmark executive compensation
against our comparator group of companies  different performance scenarios are stress-tested and back-tested to
understand possible outcomes  we review and consider risks associated with retention-related
compensation  13




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##### Table of Contents

Key policies In addition
to CPs code of business ethics, a number of other policies act to mitigate compensation risk. You can read more about ethical behaviour at CP and our code of business ethics and other policies beginning on page 5. Clawbacks Our clawback policy allows the Board to recoup short- and
long-term incentive compensation paid to a current or former senior executive if: 

the incentive compensation received was calculated based on financial results that were subsequently restated or
corrected, in whole or in part; and/or 

the executive engaged in gross negligence, fraud or intentional misconduct that caused or contributed to the need for the
restatement or correction, as admitted by the executive or as reasonably determined by the Board The Board has sole discretion to determine
whether it is in our best interests to pursue reimbursement of all or part of the incentive compensation and these actions would be separate from any actions by law enforcement agencies, regulators or other authorities. Anti-hedging Our disclosure and insider trading and reporting policy
prohibits directors, executive officers and employees from buying financial instruments that are designed to hedge or offset a decrease in the market value of equity awards or CP shares they hold directly or indirectly. Anti-pledging Our anti-pledging policy prohibits directors and executive
officers from holding any CP securities in a margin account or otherwise pledging the securities as collateral for a loan.  14




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##### Table of Contents

Compensation program Total direct compensation consists of salary, an annual short-term incentive and a long-term incentive award that focus executives on driving strong financial,
operational and customer satisfaction results and building shareholder value. Executives also receive pension benefits and perquisites as part of their overall compensation.  Element

Purpose

Risk mitigating features

Link to business and
talent strategiesLOGO

Salary
Cash (see page 16)

  competitive level of fixed pay
  reviewed annually

  external advisor benchmarks against our
comparator group to ensure appropriate levels and fairness

  attract and retain talent
  no automatic or guaranteed increases to promote a performance cultureLOGO

Short-term
incentive Cash bonus
(see page 16)

  annual performance incentive to attract and
retain highly qualified leaders   set target awards based on level

  set target performance at the beginning of the
year to assess actual performance at the end of the year   actual payouts are based on the achievement of
pre-determined corporate and individual objectives   corporate
performance has an operating income hurdle   payouts are capped
  no guarantee of a minimum payout

  attract and retain highly qualified leaders
  motivate high corporate and individual performance
  use metrics that are based on the strategic plan and approved annually
  align personal objectives with area of responsibility and role in achieving operating resultsDeferred
compensation Deferred share
units (see page 48)

  encourages share ownership
  executives can elect to receive the short-term incentive in DSUs if they have not yet met their share
ownership requirement   company provides a 25% match of the deferral amount in DSUs

  deferral limited to the amount needed to meet the
executives share ownership guidelines   aligns management interests with growth in shareholder
value   helps retain key talent
  company contributions vest after three years

  sustained alignment of executive and shareholder
interests because the value of DSUs is tied directly to our share price   cannot be redeemed for cash
until a minimum of six months after the executive leaves CPLong-term incentive (LTIP)
(see page 19)Performance
share units (see page 21)

  equity-based incentive aligns with shareholder
interests and focuses on three-year performance   accounts for 60% of an executives long-term
incentive award

  use
pre-defined market and financial metrics   the number of units
that vest is based on a performance multiplier that is capped   no guarantee of a minimum payout


  focuses the leadership team on achieving
challenging performance goals   ultimate value based on share price and company performance
  attract and retain highly qualified leadersStock options
(see page 22)

  accounts for 40% of an executives long-term
incentive award   vests over four years, term is seven years

  focuses on appreciation in our share price,
aligning with shareholder interests   only granted to executives

  focuses the leadership team on creating
sustainable long-term valueLOGO

Pension
Defined contribution and defined benefit
pension plans (see page 47)

  pension benefit based on pay and service and
competitive with the market   supplemental plan for executives and senior managers

  balances risk management of highly
performance-focused pay package

  attract and retain highly qualified
leadersPerquisites
Flexible spending
account (see page 42)

  competitive with the market

  restrictions for the CEO

  attract and retain highly qualified
leaders  15




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##### Table of Contents

2018 Executive compensation Salary Salaries are set every year based on the
executives performance, leadership abilities, responsibilities and experience as well as succession and retention considerations. The Compensation Committee also considers the economic outlook and the median salary and practices of the
comparator group before making its decisions. The base salaries of all NEOs are set in U.S. dollars consistent with industry practice. Short-term incentive plan The short-term
incentive award is an annual incentive that focuses executives on achieving strong financial, safety and operational results.  What it is

  cash bonus for
achieving pre-determined annual corporate and individual performance objectives that are tied directly to our strategy and operational requirementsPayout

  corporate performance is assessed against
financial, safety and operational measures   individual performance is assessed against individual
performance objectives   no guarantee of a minimum payoutRestrictions

  must meet minimum level of performance
  must achieve corporate operating income hurdle for any payout on individual or corporate performance to
occur   performance multiplier is capped for exceptional performance
  actual award is capped as a percentage of base salaryIf the executive retires

  executive must give three months
notice   award for the current year is pro-rated to the
retirement date The table below shows the 2018 short-term incentive awarded to the named executives. With the exception of Mr. Velani, whose
salary is set in U.S. dollars and was paid out based on a foreign exchange rate of $1.2959, other salaries in U.S. dollars have been converted into Canadian dollars using an average exchange rate in 2018 of $1.2957. We use financial and non-financial measures to assess corporate performance. Individual performance is assessed against
individual performance objectives for the year and other pre-determined goals that reflect the strategic and operational priorities critical to each executives role.   LOGO Year End Salary X Target short-term incentive (as a % of base salary) X [ Corporate performance factor x75% + Individual
performance factor x25% ] = 2018 short-term incentive Keith Creel Nadeem Velani Robert Johnson John Brooks Laird Pitz (0-200%) (0-200%) $1,457,663 120% 180% 180% $3,148,551 $722,095 80% 180% 175% $1,032,596 $576,587 75% 180% 180% $778,392 $518,280
65% 180% 175% $602,177 $485,888 65% 180% 170% $560,593 Corporate and individual performance factors are capped at 200% to limit payouts and avoid excessive
risk-taking. An employees payout on the individual component of the STIP may be zero or range from 50% to 200%. Any award payable under the individual
component is subject to a minimum level of corporate performance. No award is payable unless the minimum corporate hurdle is achieved.   16




---

##### Table of Contents

Actual STIP awards are also capped as a percentage of base salary, as shown in the table to the right. Assessing corporate performance In 2017, we announced a number of changes
to our STIP to reflect
 Payout as a % of base salaryLevel

Belowhurdle


Minimum


Target


MaximumCEO


0
%


60
%


120
%


240
%Other named executives


0
%


32.5-40
%


65-80
%


130-160
%
  CPs transition to focus on sustainable, profitable growth. No changes to the relative weighting of the financial and
operating measures have been made in 2018.  New in 2018, we replaced train speed with trip plan compliance as the operating measure under the STIP. Trip plan compliance has become CPs cornerstone operating principle and aligns our service plan and actions with actual
customer experience. By measuring trip plan compliance, CP can facilitate generating superior service that is consistent and aligned with market requirements, while controlling costs through improved efficiencies. Our previous measure, train speed,
which measures the movement time of trains from origin to destination, was used as an interim measure for trip plan compliance in 2017 as we refined our processes and gathered enough historical data to reliably and consistently measure trip plan
compliance as a compensation measure.

Safety - a foundational
principle  In 2019, we increased the weighting of our safety measure within the STIP
to 20% from 10%.  This change reinforces CPs commitment to safety and our focus on
maintaining our industry leading position in safety performance.  17




---

##### Table of Contents

Corporate performance The table below shows the 2018 scorecard and results. The targets were set with adequate stretch to motivate strong performance. The Board sets a corporate hurdle for operating income. There is no payout if we do not achieve that corporate hurdle. If we achieve the hurdle but corporate
performance is below threshold for all measures, then only the individual performance factor is used to calculate the awards. Corporate results between 50% and 200% of target are interpolated. For 2018, the operating income hurdle was set at
$2 billion. CP delivered record financial performance in 2018. A growing top line coupled with disciplined cost control measures produced record operating
income and adjusted earnings for the company. The reported operating ratio came in at 61.3% and reported operating income was $2,831 million, an all-time best for the company. From a safety perspective,
CPs personal injury rate improved 11% and our train accident frequency led the industry in this key safety metric.  Performance measure

Why it is important

Threshold
(50%)


Target
(100%)


Exceptional
(200%)


2018
result


Weighting


ScoreFinancial measuresSTIP Operating ratio
Operating expenses divided by total revenues based on an assumed fuel price and foreign exchange rate

Continues our focus on
driving down costs while focusing on growth
strategy


62.4%



62.1%



61.6%



61.3%



40%



200%STIP Operating income
($ millions) Total revenues less total
operating expenses based on an assumed foreign exchange rate

Highlights the importance of
revenue growth to our corporate strategy


2,566



2,617



2,666



2,831



40%



200%Safety measureFederal Railroad Administrations (FRA) frequency of train accidents per million
train miles relative to Class 1 railroads

Safety is our top priority, and the measure pays out at maximum only if we achieve the
stretch target and remain the best in the industry  Introducing this
measure recognizes the feedback we received from shareholders who asked for safety to be explicitly included as a performance measure


1.29



1.18



1.14



1.10



10%



200%Operating measureTrip plan compliance is calculated as the number of shipments completed on time (less than 2
hours late vs. baseline plan), divided by the total number of shipments completed

Trip plan compliance is a detailed schedule of performance and the core of CPs product
offering. It balances between customer needs and what we are capable of delivering. 
It is critical to the service we provide customers and to our growth strategy. Trip plan compliance, as a stand-alone measure, is a relatively new
measure at CP  Trip plan compliance excludes bulk commodities and empty
railcars


75%



80%



85%



62.6%



10%



0%Corporate performance factor






















180% Notes: 

A new accounting standard (ASU 2017-17) was adopted January 1, 2018 and changes applied retroactively to 2017. This
standard increased CPs 2017 adjusted operating ratio by 420 bps to 62.4% and reduced adjusted operating income by $274 million to $2,468 million. For a complete description and reconciliation please refer to Non-GAAP Measures and
Note 2 Accounting Changes in CPs 2018 annual report. 

CP has led the industry with the best FRA reportable train accident frequency for 13 consecutive years. 2017 performance of
0.99 was an all-time record for CP as well as the industry. When setting the 2018 target for train accident frequency, we considered the likelihood of repeating that performance and determined a three-year
average was a more reasonable hurdle, particularly in light of an increasing volume environment.  18




---

##### Table of Contents

The Compensation Committee may adjust the results for unusual or
non-recurring items that are outside our normal business and do not accurately reflect our ongoing operating results or business trends and affect the comparability of our financial performance year over year.
Results used under the STIP may therefore differ from our reported GAAP results. Significant items that may be adjusted so that they do not impact, either favourably or unfavourably, the assumptions made when the STIP targets were planned include:
foreign exchange rates, fuel price and land sales. No adjustments were made in 2018. Assessing individual performance Executives set individual performance objectives before the start of every financial year. The individual performance factor is based on the executives performance against those objectives and other pre-defined
quantitative and qualitative goals that reflect the strategic and operational priorities critical to each executives role, including operational management, safety, financial and other objectives. Each objective has a minimum, target and maximum. The individual performance factor ranges from 0% to 200%.  2018 individual performance factor








The individual performance factorfor
the CEO has a cap, so hisindividual performance factorcannot exceed the corporateperformance factor. 
This ensures the payout factor forthe CEO aligns with the CEOsoverall responsibility for CPsperformance.Keith Creel


180
%Nadeem Velani


175
%Robert Johnson


180
%John Brooks


175
%Laird Pitz


170
%The Compensation Committee sets the individual performance factor for the CEO. The CEO reviews the performance of his direct reports against their objectives, and recommends
their individual performance factors to the Compensation Committee. See the profiles beginning on page 26 to read about each executives individual performance in 2018. Compensation Committee Discretion The Compensation Committee has developed
principles for the use of discretion. Adjustments should not relieve management from the consequences of their decision making. Additionally, adjustments should neither reward nor penalize management for decisions on discretionary transactions,
events outside their control (such as foreign exchange rates and fuel prices that are beyond the assumptions used in the planning process) or transactions outside normal corporate planning and budgeting. As a result, the Compensation Committee can reduce the corporate performance factor for any executive officer as it deems appropriate, as long as it follows the
principles. The Board can also use its discretion to adjust the targets and payouts up or down, following the principles set out by the Compensation Committee. The Compensation Committee did not exercise any such discretion in 2018. Long-term incentive plan Long-term incentive
awards focus executives on medium- and longer-term performance to create sustainable shareholder value. Target awards are set based on the competitive
positioning of each executives compensation and the practices of companies in our peer group in order to attract and retain experienced railroad executives with highly specialized skills.  Performance share units (60%)

Stock options (40%)What they are

  notional share units that vest at the end of
three years based on absolute and relative performance and the price of CP common shares

  right to buy CP shares at a specified price in
the futurePayout

  cliff vest at the end of three years based on
performance against three pre-defined financial and market metrics 
  no guarantee of a minimum payout

  vest 25% every year beginning on the anniversary
of the grant date    expire at the
end of seven years    only have value
if our share price increases above the exercise price  19




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##### Table of Contents

Performance share units (60%)

Stock options (40%)Dividend equivalents

  earned quarterly and compound over the
three-year period

  do not earn dividend equivalentsRestrictions

  must meet minimum level of performance
   performance multiplier is capped for
exceptional performance

  cannot be exercised during a blackout
periodIf the executive retires

 must give three months notice
   award continues to vest and executive
is entitled to receive the full value as long as they have worked for six months of the performance period, otherwise the award is forfeited

  must give three months notice
   options continue to vest, but expire
five years after the retirement date or on the normal expiry date, whichever is earlier Stock options are usually granted in January immediately after the fourth quarter financial statement blackout period ends, while
performance share units (PSUs) are awarded in February after the Compensation Committee has reviewed the year-end financial results in detail. Grants are also made for special situations like retention or new hires. Special grants can include PSUs, restricted share units (RSUs), DSUs or options. These grants
are made on the first Tuesday of the month following approval. If we are in a blackout period, the grant is made after the blackout has been lifted.  Non-Compete and Non-SolicitationCP is mindful that the demand for experienced and talented railroaders is high,
particularly those with backgrounds in Precision Scheduled Railroading. To manage near-term retention risk, the companys long-term incentive award agreements contain non-compete, non-solicitation and other restrictive clauses, including non-disclosure restrictions. 
Non-compete and non-solicitation provisions may be applied if a recipient fails to
comply with certain commitments for a two-year period following the end of employment. 2018 long-term incentive awards To determine the appropriate value of long-term incentive grants provided to the named executives, the Compensation Committee considers the practices of our comparator
group and external market data, as well as internal factors including executive retention, dilutive impact and long-term value creation. The CEO did not recommend any adjustments to the 2018 awards. The table below shows the 2018 long-term incentives awarded to the named executives.  Target as a % of base salaryKeith Creel


400%Nadeem Velani


250%Robert Johnson


225%John Brooks


125%Laird Pitz


125%  20




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##### Table of Contents

2018
long-termincentive


>


Allocationaward





Performance share units





Stock options(grant value) $





$


#





$


#Keith Creel


6,888,920







4,369,757



18,300







2,519,163



43,148Nadeem Velani


1,887,712







1,199,385



5,212







688,327



13,260Robert Johnson


1,498,299







950,363



3,980







547,936



9,385John Brooks


669,720







424,798



1,779







244,922



4,195Laird Pitz


700,271







444,139



1,860







256,132



4,387 Notes: 

See the summary compensation table on page 40 for details about how we calculated the grant date fair values of the
performance share units and stock options. Both were calculated in accordance with FASB ASC Topic 718. 

The grant value of the awards based on the NYSE trading price has been converted to Canadian dollars using a 2018 average
exchange rate of $1.2957. Performance share units (PSUs) PSU awards focus executives on achieving medium-term goals within a three-year performance period. The Board sets performance measures, thresholds and targets at the beginning of the performance period. The number of units that vest is based on our performance over the three-year period. We must achieve threshold performance on a measure, otherwise the payout factor
for that measure is zero and a portion of the award is forfeited. If performance is exceptional on a measure, the Board may approve a payout of up to 200%. PSUs
earn additional units as dividend equivalents at the same rate as dividends paid on our common shares. The award is paid out in cash based on the number of units
that are earned and the average closing share price for the 30 trading days prior to the end of the performance period on the TSX or NYSE, as applicable. The award may be paid out in shares purchased on the open market, on the CEOs
recommendation, using the after-tax value. 2018 PSU awards The performance period for the 2018 PSU awards is January 1, 2018 to December 31, 2020. Performance will be assessed against the measures in the table below.
Awards will be prorated if results fall between threshold and exceptional.  2018 PSU performance measures

Why the measure is important

Threshold
(50%)


Target
(100%)


Exceptional
(200%)


WeightingPSU three-year average return on invested capital (ROIC)
Net operating profit after tax divided by average invested capital

Focuses executives on the effective use of capital as we grow
 Ensures shareholders capital is employed in a value-accretive manner


14.5%



15%



15.5%



60%Total shareholder return
Measured over three years. The percentile ranking of CPs TSX compound annual growth rate (CAGR) relative to the companies that make
up the S&P TSX Capped Industrial Index

Compares our total shareholder return (TSR) to a range of Canadian investment
alternatives  Aligns long-term incentive compensation with long-term
shareholder interests


25thpercentile



50thpercentile



75thpercentile



20%Total shareholder return
Measured over three years. The percentile ranking of CPs NYSE CAGR relative to the companies that make up the S&P 1500 Road and Rail
Index

Compares our TSR to the companies that make up the S&P 1500 Road and Rail Index, a broad
range of transportation peers  Aligns long-term incentive compensation with
long-term shareholder interests


25thpercentile



50thpercentile



75thpercentile



20%   21




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##### Table of Contents

At the end of the three-year performance period, the starting point for determining relative TSR will be the 10-day average closing share price of CP shares on the appropriate index prior to January 1, 2018 and the closing point will be the 10-day average closing share price of
CP shares on the appropriate index prior to December 31, 2020. TSR is adjusted over the period to reflect dividends paid and the multiplier is interpolated if our performance falls between 50% and 200%. If results are below the threshold level
for any of the performance measures, units for that specific measure will be forfeited. Stock options Stock options focus executives on longer-term performance. Options have a seven-year term and vest 25% each year beginning on the anniversary date of the grant. The
grant price is the last closing price of our common shares on the TSX or the NYSE on the grant date. Options only have value for the holder if our share price increases above the grant price. 2018 stock option awards The table below shows the details of the 2018
annual option award grant.  Grant value ($)


# of options


Grant priceKeith Creel


2,519,163



43,148



US$185.85 (NYSE)Nadeem Velani


688,327



13,260



$231.66 (TSX)Robert Johnson


547,936



9,385



US$185.85 (NYSE)John Brooks


244,922



4,195



US$185.85 (NYSE)Laird Pitz


256,132



4,387



US$185.85 (NYSE) The grant value of the stock option awards based on the NYSE trading price have been converted to Canadian dollars using a 2018 average
exchange rate of $1.2957. We calculated the number of options to be granted to each executive by dividing the grant value by the theoretical value of an option
(using the Willis Towers Watson binomial option pricing methodology), applied to our 30-day average closing share price on the TSX or the NYSE prior to the day of the grant. About the stock option plan The management stock option incentive plan
(stock option plan) was introduced in October 2001. Regular stock options granted before 2017 expire 10 years from the date of grant and generally vest 25% each
year over four years, beginning on the anniversary of the grant date. Stock options awarded January 1, 2017 and later have a seven-year term. If the expiry
date falls within a blackout period, the expiry date will be extended to 10 business days after the end of the blackout period date. If a further blackout period is imposed before the end of the extension, the term will be extended another 10 days
after the end of the additional blackout period. The table below sets out the limits for issuing options under the plan:  As a % of the number of shares outstandingMaximum number of shares that may be reserved for issuance to insiders
as options

10%Maximum number of options that may be granted to insiders in a one-year period

10%Maximum number of options that may be granted to any insider in a one-year period

5%As a % of the number of shares outstanding at
the time the shares were reservedMaximum number of options that may be granted to any person

5% We measure dilutionby determining the number of options available for issuance and the number of options outstanding as a
percentage of outstanding shares. Our potential dilution at the end of 2018 was 2%. Notwithstanding the limits noted above, the dilution level, measured by the number of options available for issuance as a percentage of outstanding shares, continues
to be capped, at the discretion of the Board, at 7%.  22




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##### Table of Contents

The option grant price is the last closing market price of shares on the grant date on the TSX or the NYSE (for
grants after December 15, 2014 depending on the currency of the grant). The table below shows the burn ratefor the last three fiscal years,
calculated by dividing the number of stock options granted in the fiscal year by the weighted average number of outstanding shares for the year.  (as at December 31)

2016


2017


2018Number of options granted


403,740



369,980



282,125Weighted number of shares outstanding


149,565,498



145,863,318



142,885,817Burn rate


0.27%



0.25%



0.20% The table below shows the options outstanding and available for grant from the Management Stock Option Incentive Plan as at
December 31, 2018.  Number of options/shares


Percentage of outstanding sharesOptions outstanding (as at December 31, 2018)


1,474,273



1.05
%Options available to grant (as at December 31, 2018)


1,301,047



0.93
%Shares issued on exercise of options in 2018


142,552



0.10
%Options granted in 2018


282,125



0.20
% Since the launch of the management stock option incentive plan in October 2001, a total of 18,078,642 shares have been available for
issuance under the plan and 15,160,770 shares have been issued through the exercise of options. A stand-alone option award was granted to Mr. Creel in 2013,
as disclosed in prior annual management proxy circulars. The award was not granted under the management stock option incentive plan. There are 59,325 options outstanding. We do not provide financial assistance to option holders to facilitate the purchase of shares under the plan. Additional information There is a double trigger on options so that if
there is a change of control and only if an option holder is terminated without cause, all of his or her stock options will vest immediately according to the change in control provisions in the stock option plan. If an employee retires, the options continue to vest and expire on the original expiry date or five years from retirement, whichever is earlier. If an employee is terminated without cause, the employee has six months to exercise any vested options. If the employee resigns, the employee has 30 days to exercise
any vested options. If an employee is terminated with cause all options are cancelled. Options will continue to vest and expire on its normal expiry date if the
holders employment ends due to permanent disability. If an option holder dies, the options will expire 12 months following his or her death and may be exercised by the holders estate. Options can only be assigned to the holders family trust, personal holding corporation or retirement trust, or a legal representative of an option holders
estate or a person who acquires the option holders rights by bequest or inheritance. The CEO, the Chair of the Board and the Compensation Committee chair
have authority to grant options to certain employees based on defined parameters, such as the position of the employee and the expected value of the option award. In 2018, the Compensation Committee authorized a pool of 50,000 options for allocation
by the CEO, who granted 3,467 options to three employees to recognize performance and for retention. Making changes to the plan The Board can make the following changes to the plan without shareholder approval: 

changes to clarify information or to correct an error or omission  23




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##### Table of Contents



changes of an administrative or a housekeeping nature 

changes to eligibility to participate in the plan 

terms, conditions and mechanics of granting stock option awards 

changes to vesting, exercise, early expiry or cancellation 

amendments that are designed to comply with the law or regulatory requirements The Board must receive shareholder approval to make other changes, including the following, among other things: 

an increase to the maximum number of shares that may be issued under the plan 

a decrease in the exercise price 

a grant of options in exchange for, or related to, options being cancelled or surrendered The Board has made two amendments to the plan since it was introduced in 2001: 

on February 28, 2012, the plan was amended so that a change of control would not trigger accelerated vesting of
options held by a participant, unless the person is terminated without cause or constructively dismissed 

on November 19, 2015, the plan was amended to provide net stock settlementas a method of exercise, which
allows an option holder to exercise options without the need for us to sell the securities on the open market, resulting in less dilution Payout of 2016 PSU award The 2016 PSU grant for the period of January 1, 2016 to December 31, 2018 was paid out on
February 22, 2019. The named executives received a payout of 177% on the award, which includes dividends earned up to the payment date. The table below shows the difference between the actual payout value and the grant value for each named
executive.   LOGO 2016 grant value ($) ( 2016 PSU award (# of units) + Dividend equivalents (# of units) ) x 2016 PSU performance factor (0-200%) x
Market share price = PSU value ($) Keith Creel 3,309,70614,832444177%US$194.427,171,365 Nadeem Velani 131,63478224177%$259.49369,992 Robert Johnson 493,8232,21366177%US$194.421,070,185 John Brooks 259,9651,16535177%US$194.42563,488 Laird Pitz
433,3501,94258177%US$194.42938,983 Closing market share price is calculated on days when both the TSX and NYSE markets are open. For Mr. Velani, the
market share price was calculated using $259.49, the average 30-day closing price of our shares prior to December 31, 2018 on the TSX. For Mr. Creel, Mr. Johnson, Mr. Brooks and
Mr. Pitz, the market share price was US$194.42, the average 30-day closing price of our shares prior to December 31, 2018 on the NYSE, and the value of these shares were converted to Canadian dollars
using the year-end exchange rate of $1.3642. For comparability, for Mr. Creel, Mr. Johnson, Mr. Brooks and Mr. Pitz, the 2016 grant value was converted using an exchange rate of $1.3248. How we calculated the 2016 PSU performance factor The PSU performance
factor for the three-year period from January 1, 2016 to December 31, 2018 is 177%, as shown in the table below. The payout value has been calculated in accordance with the terms of the performance share unit plan and the 2016 award
agreement.  PSU measures

Threshold
(50%)


Target(100%)


Maximum
(200%)


PSUresult


Weighting


PSUperformancefactor2018 Operating ratio:Operating expenses divided by total
revenues


61.0%



59.5%



58.0%



56.1%
(1)


60%



200%2016 to 2018 average ROIC: Net operating profit after tax divided by invested capital averaged over three years(2)


14%



15%



15.5%



15.3%



20%



160%Total shareholder return: Three-year CAGR relative to the S&P/TSX 60 Index


0%



1%



5%



5.7%



10%



200%Total shareholder return: Ranking at the end of the three years relative to Class 1 Railroads


fourth



third



first



fourth



10%



50%PSU performance factor






















177%  24




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##### Table of Contents

(1)
Results for Operating Ratio have been adjusted to reflect accounting standards in place when the targets were set. The
table below shows the impact of the new accounting standard (ASU 2017-17) which came into effect January 1, 2018. (2)
We make certain assumptions when we set targets therefore results under the PSU plan reflect changes to those assumptions
so we can measure the true operating performance of the business. ROIC was adjusted in 2016 and 2017 for the performance of the pension plan as its impact on the balance sheet was not a good indication of managements ability to deliver returns
from the core business on its invested capital.  Revenue
($ million)


Expense
($ million)


Operating
Ratio


Operating Income($ million)2018 Results


7,316



4,485



61.3%



2,831Adjustment for 2018 Accounting Standards Update (ASU 2017-07)






(384)



(5.2)%



3842018 Results Excluding Accounting Change


7,316



4,101



56.1%



3,215  25




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##### Table of Contents

KEITH E. CREELPRESIDENT AND CHIEF EXECUTIVE
OFFICER  LOGO

Mr. Creel was appointed as the President and Chief Executive Officer (CEO) on January 31, 2017, a planned transition that had been in place
since he was recruited to CP in February 2013 as President and Chief Operating Officer (COO). 
Prior to joining Canadian Pacific, Mr. Creel had a very successful operating career that began in 1992 at Burlington Northern as a management trainee in operations
and eventually led to his becoming the EVP and COO at CN in 2010.  Mr. Creel obtained a
Bachelor of Science in marketing from Jacksonville State University and has completed the Advanced Management Program at the Harvard Business School. He served as a commissioned officer in the U.S. Army during which time he served in the Persian
Gulf War. 2018 performance The end of 2018 marked
Mr. Creels second year as CEO of CP. Our record results show the capability of strong leadership and dedication to deliver on the principles of our operating model. As President and CEO, Mr. Creel is responsible for providing the
leadership and the strategic vision necessary to develop our people to drive long-term sustainable, profitable growth and ultimately build shareholder value. In
2018 Mr. Creel focused on the following key areas:  1.
Strategic direction  2.
Creating a high-performance culture by developing an industry-leading team  3.
Stakeholder advocacy and engagement  4.
Driving sustainable, profitable growth  5.
Operating and safety performance 2018 highlights In 2018, CP delivered a record-setting year by nearly every
financial performance measure. We delivered our highest ever revenues, and we delivered diluted EPS of $13.61 per share and grew adjusted diluted EPS by 27% to a record $14.51 per share. Our total revenues grew by 12% to $7.3 billion, which, combined with our industry-leading operating model, produced record operating income and an operating ratio
of 61.3%. We invested $1.6 billion in our capital program and demonstrated our commitment to shareholders by returning approximately $1.45 billion through share repurchases and dividends. We also increased our quarterly dividend by 15.6%,
from $0.5625 to $0.65, and announced a new share repurchase program. On the labour front we continued our trend of securing long-term agreements with unions on
both sides of the border. We currently have contracts in place with all of our Canadian unions until 2021, providing labour stability and a solid foundation for continued growth. Internally we focused on employee outreach, engagement and on our most
important foundation-developing people. Throughout the year, we remained steadfast in our commitment to safety. We improved our personal injury rates by 11% to
their lowest-ever levels and for the 13th consecutive year reported the lowest train accident frequency in the industry. Strategic direction When Mr. Creel became President and CEO he quickly began setting the direction for the next chapter of the CP story. Mr. Creel remains disciplined in his
commitment to Precision Scheduled Railroading and creating a growth strategy that leverages the strengths of CPs talented workforce and network. Precision Scheduled Railroading has enabled CP to lower its operating ratio dramatically, improve
service, reinvest record amounts into our network and create significant shareholder value in a very short time. Developing the right leaders and the building the right culture for continued success is integral to CPs continued success, short-
and long-term. Under Mr. Creels leadership, our operating, marketing and finance teams are working collaboratively to create opportunities for growth.
Our increased capacity and efficiencies across our network mean we have the ability to grow sustainably and at a low incremental cost. Our focus on safety, service and innovation, combined with our financial strength and our ability to capitalize on
our network in a disciplined and cost-effective way, are key elements for achieving our strategy.  26




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##### Table of Contents

Creating a high performance culture by developing an industry-leading team As part of his appointment to President and CEO in 2017, Mr. Creel handpicked a leadership team to support CPs growth strategy. Having the right culture and
the right people with the right attitude ensures we deliver superior value and service to our customers. Throughout 2018, Mr. Creel worked diligently to
build and strengthen our team of railroaders and promote a culture of pride and accountability. By incentivizing the right behaviour, promoting collaboration and providing employees with the right tools for development, we have built an innovative
team of railroaders who are better equipped to understand the needs of our customers and their business. Mr. Creel has demonstrated exceptional leadership in
a complex and evolving business environment. He has strongly focused his attention on creating a culture of accountability, where people demonstrate high levels of ownership to collectively work towards the same common goals and objectives. With
this objective in mind, Mr. Creel formed a leadership development strategy focused on developing both current and future leaders at CP. As part of this strategy, he established a Coaching Capability Program designed for high potential
managers to expand their leadership skill set, and also introduced an Executive Coaching Program for existing and future leaders to receive one-on-one coaching and a
customized development program from a certified executive coach. Mr. Creel understands that a diverse and inclusive work environment provides the company
with a broader range of experience and perspectives that, in turn, creates a stronger and more successful railway. During 2018, Mr. Creel continued his focus on diversity initiatives to increase the number of women, Aboriginal Peoples and
minorities working throughout CP. Under Mr. Creels leadership, CP initiated a series of womens leadership events in key cities across our network. These events provided a space for women to connect and share experiences and ideas
about their triumphs and challenges working in a male-dominated industry and hear from one another how they contribute to CPs success. CP strives to be the
employer of choice for veterans exiting the military and entering civilian life by engaging with veterans groups across North America. Through targeted career fairs, partnering with organizations in both Canada and United States that support
veteran employment and recruitment and continuing to work with both the Canadian and United States armed forces, CP hired 200 veterans in 2018 and maintained our status as a Military Friendly Employer. Mr. Creel continued to engage and deepen his relationship with the 13,000 employees across the CP network with town halls in Port Coquitlam, Minneapolis and
Montreal. During these town halls he has been able to share his vision for the future of CP, meet with employees and respond to their questions. Through
collaboration, communication and trust, CP continues to work with union leadership to achieve long-term labour agreements. Mr. Creel led several successful negotiations resulting in innovative labour deals aligned to our growth strategy. In
Canada, three main labour agreements were negotiated and ratified in 2018: a new four-year agreement with CP conductors and locomotive engineers (TCRC-T&E), a three-year deal with the International
Brotherhood of Electrical Workers (IBEW), and a four-year agreement with our mechanical employees (Unifor) providing for long-term stability for all parties involved. Stakeholder advocacy and engagement Mr. Creel held a range of meetings
throughout 2018 with a broad range of external stakeholders, including current and prospective investors, First Nations, industry associations, government, regulators, customers and policy makers. This included attending various conferences and
events as a guest speaker, advocating for a balanced approach on various industry topics such as the passing of Bill C-49 and improving rail safety through meetings with government officials and consistent,
proactive outreach. Mr. Creel also hosted an Investor Day in October 2018, CPs first in four years and Mr. Creels first since his
appointment as President and CEO where he outlined CPs strategic vision to drive sustainable, profitable growth. Driving sustainable, profitable growth In 2018, CP grew revenues by 12% to a record-setting $7.3 billion. Not only did CP experience revenue growth across each of its lines of business, we set
records across many areas including Canadian grain, potash, and domestic intermodal. A strong demand environment, coupled with our network capacity and ability to
provide superior service was a big part of this success. We leveraged our transload footprint and new service capabilities to grow our market share in forest products and energy, chemical and plastics. Our network capacity and service reliability
also enabled us to win new business in the intermodal and automotive segments.  27




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##### Table of Contents

Under Mr. Creels leadership, CP has committed to a $500 million multi-year investment in its covered
hopper fleet; the new car design is shorter, lighter and can carry 15% more grain per train. As CPs largest line of business, the efficient and reliable movement of grain is key to CPs long-term success. An open and constructive dialogue with our customers and supply chain partners is also key to CPs sustained success in the marketplace. In 2018, CP hosted a
Customer Advisory Panel to hear from customers first-hand about the tools, technologies and communications most important to them. CP also hosted a conference with 39 of its short line and regional rail partners to explore new business opportunities
and strengthen existing relationships. CP continues to build a strong foundation for future growth by taking a disciplined approach to the market. Our commitment
to Precision Scheduled Railroading uniquely positions us to leverage our low cost base and best-in-class service to drive long-term sustainable, profitable growth for
many years to come. Operating and safety performance In 2018, CP was
able to deliver a watershed year across the board from an operational productivity standpoint, as we continued to see train weights improve to hit record levels. Fuel efficiency improved by another 3 percent to hit a record of 0.953 gallons per
1,000 GTMs, which not only is a CP record, it is an industry best. CP continued to ensure the right headcount was in place to meet market demands, resulting in
consistent, reliable service and value to our customers. In 2018 alone, the company hired over 1,000 new operations employees, in addition to hiring new employees in other areas and training existing conductors as locomotive engineer trainees. CP
will continue to hire and train operations employees across the network, to meet market demands in 2019. CP continued its focus on promoting employee safety
through our Home Safe program  an initiative designed to improve our safety culture on the job and at home. Under Mr. Creels direction all employees were asked to renew their commitment to safety on the job and to watching
out for one another. This was done through a series of educational workshops and safety-focused meetings across the network. In 2018, CP was named the proud
recipient of two Railway Association of Canada Safety awards. The first award recognized CPs Locomotive Engineer Training Simulation Program and the classroom version of our Simulation Training for Conductors initiative. Using these
simulators, trainees experience operating a locomotive on CP routes across North America. The second award recognized CPs Predictive Wayside Detection initiative. CP is the first railway to utilize the data generated by wayside detection
systems to proactively predict failures, enabling risk to be eliminated before incidents occur. Precision Scheduled Railroading remains the bedrock of our entire
business, not just our operating model. Under Mr. Creels leadership, our continued success will come from CPs commitment to the foundations of Precision Scheduled Railroading, our deep bench of industry-leading railroaders, a
disciplined approach to capital investment, network capacity and a focus on sustainable profitable growth. 2018 compensation The table below shows the compensation awarded to Mr. Creel for 2018.  LOGO

Compensation (in CAD $000)

2018FixedBase earnings


1,454VariableShort-term incentive


3,149Long-term incentive- PSUs


4,370- Stock options


2,519Total direct compensation


11,492Total target direct compensation


9,038Notes:
Salary is the actual amount received in the year. Payments made in U.S. dollars have been converted to Canadian dollars using an average exchange rate for the year of
$1.2957. Actual 2018 pay mix Stock options 22% Salary 13% Short term incentive 27% Performance share units 38% Total variable: 87%  28




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##### Table of Contents

Salary Mr. Creel did
not receive a salary increase in 2018. 2018 Short-term incentive Based on
our 2018 corporate performance and the assessment of his individual performance, Mr. Creel received a cash bonus of $3,148,551 for 2018, calculated as follows:   LOGO Year EndSalary X Targetshort-termincentive X [ Corporateperformancefactor+ Individualperformancefactor]= 2018short-termincentive(as
a % of base salary)180% x 75%180% x 25%(0-200%)(0-200%)$1,457,663120%$2,361,414$787,137$3,148,551 Year-end salary
and the 2018 STIP award were paid in U.S. dollars and have been converted to Canadian dollars using an average exchange rate of $1.2957 for 2018. 2018 Long-term
incentive Mr. Creel received annual 2018 long-term incentive awards with a total grant value of $6,888,920, 100% of his target award. The grant was
allocated 60% PSUs and 40% stock options. Realized and realizable pay The value of Mr. Creels incentive compensation is based on our performance over the period and, for the long-term incentive, our share price when the awards
vest. The graph below shows the three-year average of Mr. Creels granted and realized and realizable pay from 2016 to 2018.   LOGO Notes: Summary compensation table:average of salary earned, actual cash bonus received, and long-term incentives granted (using the grant date fair value from 2016 to 2018 as disclosed in the summary compensation table on page 40). The compensation figures have been converted to
Canadian dollars using the following average exchange rates: $1.3248 for 2016, $1.2986 for 2017 and for $1.2957 for 2018. Realized and realizable:average
of salary earned, actual cash bonus received, the value of long-term incentive awards that have vested or been exercised, and the estimated current value of unvested long-term incentive awards granted from 2016 to 2018: 

vested PSUs and stock options are valued at the time of vesting or exercise  29




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##### Table of Contents



the value of vested 2016 PSUs paid in February 2019 was calculated using the
30-day average trading price of our shares prior to December 31, 2018 of US$194.42 on the NYSE with a performance multiplier of 1.77 and includes dividends earned up to the payment date 

the value of unvested 2017 and 2018 PSUs are based on the closing price of our shares on December 31, 2018 of
US$177.62 on the NYSE with a performance multiplier of 1.0. PSUs include reinvestment of additional units received as dividend equivalents 

the value of unvested/unexercised stock options is based on the closing price of our shares on December 31, 2018 of
US$177.62 on the NYSE 

the compensation figures for salary earned and actual bonus received have been converted to Canadian dollars using the
following average exchange rates: $1.3248 for 2016, $1.2986 for 2017 and for $1.2957 for 2018 

the value of any realized and realizable PSUs and options have been converted into Canadian dollars using the 2018 year-end exchange rate of $1.3642 

The up-front performance stock options grant received in 2017 is included in
realizable pay We also compare the realized and realizable value of $100 awarded in total direct compensation to Mr. Creel in each year to
the value of $100 invested in CP shares on the first trading day of the period, assuming reinvestment of dividends, to show a meaningful comparison of shareholder value. Pay linked to shareholder value The table below shows
Mr. Creels total direct compensation in Canadian dollars in each of the last three years, compared to its realized and realizable value as at December 31, 2018. We also compare the realized and realizable value of $100 awarded in
total direct compensation to Mr. Creel in each year to the value of $100 invested in CP shares on the first trading day of the period, assuming reinvestment of dividends, to show a meaningful comparison of shareholder value.  (Cdn$)










Value of $100Compensationawarded


Realized and realizable value
of compensation as atDecember 31, 2018


Period


Keith Creel


Shareholder2016

$
7,696,926


$
14,415,506



Jan 1, 2016 to Dec 31, 2018



193.81



141.192017

$
18,780,304


$
17,664,837



Jan 1, 2017 to Dec 31, 2018



94.06



129.382018

$
11,491,066


$
9,069,642



Jan 1, 2018 to Dec 31, 2018



78.93



106.81 Mr. Creels compensation awarded is as disclosed in the summary compensation table. Mr. Creels realized and
realizable value for salary earned and actual bonus received have been converted to Canadian dollars using the following average exchange rates: $1.3248 for 2016, $1.2986 for 2017 and for $1.2957 for 2018. The value of any realized and realizable
long-term incentive is converted into Canadian dollars using the 2018 year-end exchange rate of $1.3642. Equity
ownership (at February 28, 2019)  Requirement (as
a multiple of salary)

Minimumownership value ($)


Shares ($)

Deferred shareunits ($)

Total ownershipvalue ($)

Total ownership(as a multiple of salary)6x


9,155,747


832,035

8,594,233

9,426,268


6.18x Mr. Creel has met his share ownership requirements. Values are based on US$206.48, the closing price of our common shares on the
NYSE on February 28, 2019 and have been converted using an exchange rate of $1.3169. 2019 Compensation Mr. Creels 2018 compensation has remained unchanged since his agreement was signed in 2016. Effective January 1, 2019, Mr. Creel received a 3%
increase in base salary, his bonus target became 125% of his base salary and his long-term incentive target became 600% of his base salary. Consistent with Mr. Creels 2016 employment agreement, his 600% LTI target has been reduced by 100%
(to a total of 500% each year) until the end of 2021 to fund an upfront performance grant that he received in 2017.  30




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NADEEM S. VELANI  EXECUTIVE VICE-PRESIDENT AND CHIEF FINANCIAL OFFICER  LOGO

Mr. Velani was appointed Vice-President and Chief Financial Officer on October 18, 2016 and was appointed Executive Vice-President and Chief
Financial Officer on October 17, 2017. Mr. Velani is a key member of the senior management team responsible for the long-term strategic direction of the company. Other responsibilities include financial planning, reporting and accounting
systems, as well as pension, treasury, investor relations and tax functions.  Mr. Velani
joined CP in March 2013 and most recently served as Vice-President Investor Relations. Prior to CP, Mr. Velani spent approximately 15 years at CN where he worked in a variety of positions in financial planning, sales and marketing, investor
relations and the Office of the President and CEO. 2018 performance The CEO assessed
Mr. Velanis performance in 2018 against his individual performance objectives, which included leadership development and building a strong team of financial leaders, implementing CPs updated pension plan investment strategy,
continued improvement of the financial planning and forecasting process to support CPs goal of sustainable, profitable growth, as well as prudent capital allocation to deliver long-term shareholder returns. In addition, Mr. Velani was
responsible for leading an update of the companys strategic multi-year plan which was presented to the financial community at CPs first investor day since 2014. All aspects of these functions were taken into consideration as part of the assessment. Mr. Velani was assessed as exceeding his individual performance objectives
for the year. The assessment was reviewed by the Compensation Committee and approved by the Board. 2018 compensation The table below is a summary of the compensation awarded
to Mr. Velani for 2018.  LOGO

Compensation (in CAD $000)

2018FixedBase earnings


667VariableShort-term incentive


1,033Long-term incentive- PSUs


1,199- Stock options


688Total direct compensation


3,587Total target direct compensation


3,105 Salary Mr. Velani received an increase
in 2018 to bring his salary closer to the median of his peers in our comparator group. Further, the currency of his salary was set in U.S. dollars consistent with other NEOs and industry peers. Mr. Velanis salary was paid out based on a
foreign exchange rate of $1.2959. 2018 short-term incentive Based on
our 2018 corporate performance and the assessment of his individual performance, Mr. Velani received a cash bonus of $1,032,596 for 2018, calculated as follows:   LOGO Year EndSalary X Targetshort-termincentive X [ Corporateperformancefactor + Individualperformance factor] =
2018short-termincentive(as a % ofbase salary)180% x 75%175% x 25%(0-200%)(0-200%)$722,09580%$779,863$252,733$1,032,596  31




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##### Table of Contents

2018 long-term incentive Mr. Velani received annual 2018 long-term incentive awards with a total grant value of $1,887,712, 100% of his target award. The grant was allocated 60% PSUs and
40% stock options. Equity ownership (at February 28, 2019)  Requirement (as
a multiple of salary)

Minimumownership value ($)


Shares ($)


Deferred shareunits ($)


Total ownershipvalue ($)


Total ownership(as a multiple of salary)3x


2,216,280



292,097



806,549



1,098,646



1.49x Mr. Velani is on track to meet his share ownership requirements by February 2022. Values are based on $271.92, the closing price of
our common shares on the TSX on February 28, 2019.  32




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##### Table of Contents

ROBERT A. JOHNSON  EXECUTIVE VICE-PRESIDENT, OPERATIONS  LOGO

Mr. Johnson was appointed as Executive Vice-President, Operations in April of 2016. In this role, Mr. Johnson has overall operational
responsibility for CPs rail network, including aspects of operational safety, service, engineering and mechanical services in both Canada and the U.S. with a focus on train performance and overall fluidity of the network.
 Prior to this appointment, Mr. Johnson was CPs Senior Vice-President Operations,
Southern Region.  Mr. Johnsons railroad career spans over 37 years. He spent 32 of
those years with BNSF where he held successively more responsible roles in operations, transportation, engineering, and service excellence. His most recent position at BNSF was General Manager, Northwest Division, overseeing day-to-day operations for that region. 2018 performance The CEO assessed
Mr. Johnsons performance in 2018 against his individual performance objectives in the areas of operational performance, cost control and safety. During 2018, Mr. Johnson was involved in multiple union negotiations, resulting in the
signing of long-term contracts which will continue to bring labour stability to the CP family and our customers. Mr. Johnson was instrumental in right-sizing the operations workforce. Over 1000 employees
were recruited and trained which allowed CP to increase revenue by handling record volumes. Mr. Johnson also championed improvements in operational safety in 2018, where CP completed the year with an
all-time low personal injury frequency ratio as well as remaining the industry leader in train accident safety. Mr. Johnson was assessed as having exceeded his overall individual performance objectives. The assessment was reviewed by the Compensation Committee and reviewed and approved by the Board. 2018 compensation The table below is summary of the compensation awarded to
Mr. Johnson for 2018.  LOGO

Compensation (in CAD $000)

2018FixedBase earnings


573VariableShort-term incentive


778Long-term incentive- PSUs


950- Stock options


548Total direct compensation


2,849Total target direct compensation


2,306Notes:
Salary is the actual amount received that year. Payments made in U.S. dollars have been converted to Canadian dollars using an average exchange rate for the year of
$1.2957. Salary Mr. Johnsons salary was
increased to US$445,000 in 2018. 2018 short-term incentive Based on our
2018 corporate performance and the assessment of his individual performance, Mr. Johnson received a cash bonus of $778,392 for 2018, calculated as follows:  LOGO Year EndSalary X Targetshort-termincentive X [ Corporateperformancefactor + Individualperformancefactor ] =
2018short-termincentive(as a % ofbase salary)180% x 75% 180%x 25%(0-200%)(0-200%)$576,58775%$583,794$194,598$778,392  33




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##### Table of Contents

Year-end salary and the 2018 STIP award were made in U.S. dollars have been
converted to Canadian dollars using an average exchange rate of $1.2957 for 2018. 2018 long-term incentive Mr. Johnson received 2018 long-term incentive awards in the form of PSUs and Options with a total grant value of $1,498,299, 100% of his target award. The grant
was allocated 60% PSUs and 40% stock options. Equity ownership (at February 28, 2019)  Requirement (as
a multiple of salary)

Minimumownership value ($)


Shares ($)


Deferred shareunits ($)


Total ownershipvalue ($)


Total ownership(as a multiple of salary)3x


1,758,062



157,379



1,749,442



1,906,821



3.25x Mr. Johnson has met his share ownership requirements. Values are based on the US$206.48 closing price of our shares on the NYSE on
February 28, 2019 and have been converted using an exchange rate of $1.3169.  34




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##### Table of Contents

JOHN K. BROOKSSENIOR VICE-PRESIDENT AND CHIEF MARKETING OFFICER  LOGO

Mr. Brooks was appointed Executive Vice-President and Chief Marketing Officer (CMO) on February 14, 2019. During the financial year ended
December 31, 2018, Mr. Brooks was CPs Senior Vice-President and Chief Marketing Officer. 
During Mr. Brooks sales and marketing career he has held senior responsibilities in all lines of business, including coal, chemicals, merchandise
products, grain and intermodal. He began his railroading career with Union Pacific and later helped start I&M Rail Link, LLC, which was purchased by the Dakota, Minnesota and Eastern Railroad (DM&E) in 2002. Mr. Brooks was Vice-President of
Marketing at the DM&E prior to it being acquired by CP in 2007.  In the role of CMO,
Mr. Brooks is responsible for CPs business units and leading a group of highly capable sales and marketing professionals across North America. In addition, Mr. Brooks is responsible for strengthening partnerships with existing
customers, generating new opportunities for growth, enhancing the value of the companys service offerings and developing strategies to optimize CPs book of business.
 With more than 20 years in the railroading business, Mr. Brooks brings a breadth of
experience to the CMO role that will be pivotal to CPs continued and future success. 2018 performance The CEO assessed
Mr. Brooks performance in 2018 against his individual performance objectives, which included the ongoing development and organization of the sales and marketing team, revenue growth, improving the quality of revenue, customer
relationships, network development by expanding our reach through new market offerings, transloads and short lines, enhancing our product offering, improving customer experience through advisory councils and by measuring customer experience and
finally, technology. In addition, Mr. Brooks leads his team in the development and presentation of CPs multi-year plan which was presented at CPs Investor Day. Mr.Brooks was assessed as having exceeded his overall individual
performance objectives. The assessment was reviewed by the Compensation Committee and reviewed and approved by the Board. 2018 compensation The table below is summary of the compensation awarded to
Mr. Brooks for 2018.  LOGO

Compensation (in CAD $000)

2018FixedBase earnings


499VariableShort-term incentive


602Long-term incentive- PSUs


425- Stock options


245Total direct compensation


1,771Total target direct compensation


1,503Notes: Salary is the actual amount received that
year. Payments made in U.S. dollars have been converted to Canadian dollars using an average exchange rate for the year of $1.2957. Salary Mr. Brooks salary was
increased to US$400,000 in 2018.  35




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##### Table of Contents

2018 short-term incentive Based on our 2018 corporate performance and the CEOs assessment of his individual performance, Mr. Brooks received for a cash bonus of $602,177 for 2018,
calculated as follows:   LOGO 2018 long-term incentive Mr. Brooks
also received 2018 long-term incentive awards with a total grant value of $669,720, 100% of his target award. The grant was allocated 60% PSUs and 40% stock options. Equity ownership(at February 28, 2019)  Requirement (as
a multiple of salary)

Minimumownership value ($)


Shares ($)


Deferred shareunits ($)


Total ownershipvalue ($)


Total ownership(as a multiple of salary)3x


2,074,118



511,067



495,596



1,006,663



1.46x Mr. Brooks is on track to meet his share ownership requirements by February 2024. Values are based on US$206.48, the closing price
of our shares on the NYSE on February 28, 2019 and have been converted using an exchange rate of $1.3169. Effective February 14, 2019, Mr. Brooks
was promoted to Executive Vice-President and Chief Marketing Officer. His salary increased to US$525,000, his annual bonus was increased to 75% of his annual salary and his long-term incentive was increased to 225% of his annual salary.  36




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##### Table of Contents

LAIRD J. PITZ  SENIOR VICE-PRESIDENT AND CHIEF RISK OFFICER  LOGO

Mr. Pitz was promoted to Senior Vice-President and Chief Risk Officer in October of 2017. This was part of the overall realignment of the risk
and insurance functions for succession purposes, and to retain Mr. Pitz for the necessary development of the succession candidates. He is responsible for all aspects of risk-management in Canada and the U.S., including police services, casualty
and general claims, environmental risk, field safety and systems, operational regulatory affairs and training, disability management and forensic audit investigations. Mr. Pitz joined CP on April 2, 2014, as Vice-President of Security and
Risk Management.  Mr. Pitz, a Vietnam War veteran and former FBI special agent, is a 40-year career professional who has directed strategic and operational risk-mitigation, security and crisis-management functions for companies operating in a wide range of fields including defence, logistics and
transportation. 2018 individual performance The CEO assessed
Mr. Pitzs performance in 2018 against his individual performance objectives, which focused mainly on reducing risk and liability for the company. This included mitigating risk in several key areas: safety, environmental, police security,
casualty management, regulatory/operating practices, forensic and internal audit and disability management. Under Mr. Pitzs leadership, CP has made significant progress in mitigating its overall risk, including the following results in
2018: $81 million reduction of liabilities, recoveries and cost savings including a $10 million reduction in disability management expense, $21.5 million reduction in U.S. and Canadian claims expense, 11% reduction in FRA Personal
Injury Rate to 1.47 (lowest in CPs history), 3.5% reduction in property insurance renewal and the creation of an Emergency Operations Centre at Ogden. Mr. Pitz was assessed as having exceeded his overall individual performance objectives. The assessment was reviewed by the Compensation Committee and reviewed and approved by the Board. 2018 compensation The table below is a summary of the compensation awarded
to Mr. Pitz for 2018.  LOGO

Compensation (in CAD $000)

2018FixedBase earnings


482VariableShort-term incentive


561Long-term incentive- PSUs


444- Stock options


256Total direct compensation


1,743Total target direct compensation


1,409Notes: Salary is the actual amount received that
year. Payments made in U.S. dollars have been converted to Canadian dollars using an average exchange rate for the year of $1.2957. Salary Mr. Pitzs salary was
increased to US$375,000 in 2018. 2018 short-term incentive Based on our
2018 corporate performance and the assessment of his individual performance, Mr. Pitz received a cash bonus of $560,593 for 2018, calculated as follows:  LOGO  37




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##### Table of Contents

Year-end salary and 2018 STIP award were made in U.S. dollars and have been
converted to Canadian dollars using an average exchange rate of $1.2957 for 2018. 2018 long-term incentive Mr. Pitz also received 2018 annual long-term incentive awards in the form of PSUs and Options with a total grant value of $700,271, 100% of his target award. The
grant was allocated 60% PSUs and 40% stock options. Equity ownership(at February 28, 2019)  Requirement (as
a multiple of salary)

Minimumownership value ($)


Shares ($)


Deferred shareunits ($)


Total ownershipvalue ($)


Total ownership(as a multiple of salary)2x


1,053,520



17,798



1,196,596



1,214,394



2.31x Mr. Pitz has met his share ownership requirements. Values are based on US$206.48, the closing price of our shares on the NYSE on
February 28, 2019 and have been converted using an exchange rate of $1.3169.  38




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##### Table of Contents

Share performance and cost of management The graph below shows the total shareholder return (TSR) of $100 invested in CP shares compared to the two major market indices over the last five years ending
December 31, 2018 and assumes reinvestment of dividends. The S&P 500 Index return over that time frame was aided by the Tax Cuts and Jobs Act of 2017.
The graph shows that shareholder value continues to perform as the total direct compensation (TDC) paid to our named executives has declined and stabilized with our new team. Our share price on the TSX was $223.75 at the beginning of the performance
period (US$192.69 on the NYSE) compared to $242.24 at the end of 2018 (US$177.62 on the NYSE), a growth in share appreciation of 8.3% on the TSX. Our total shareholder return over the five-year period was 12.5% on the TSX, assuming reinvestment of
dividends. The total compensation value for NEOs as disclosed in the summary compensation table is 0.3% of our total revenues of $7.3 billion for 2018.   LOGO at December 31CP TSR (C$)CP TSR (US$)S&P/TSX Composite Index (C$)S&P 500 Index (US$)TDC ($
thousands)2014100.00100.00100.00100.0035,017201579.3866.5591.6899.2735,485201686.8375.16111.01108.7431,7962017106.0399.87121.11129.8627,4712018112.3595.66110.34121.7622,210 Notes: 

Total direct compensationis the total compensation awarded to the named executives, as reported in the summary
compensation table in prior years. 

In years where there weremore than five named executives, we used the following to calculate total direct
compensation in the table above: 

2018: Keith Creel, Nadeem Velani, Robert Johnson, Laird Pitz and John Brooks 

2017: Keith Creel, Nadeem Velani, Robert Johnson, Laird Pitz and Jeffrey Ellis 

2016: Hunter Harrison, Nadeem Velani, Keith Creel, Robert Johnson and Laird Pitz 

2015: Hunter Harrison, Mark Erceg, Keith Creel, Laird Pitz and Mark Wallace 

2014: Hunter Harrison, Bart Demosky, Keith Creel, Robert Johnson and Anthony Marquis 

Mr. Harrison was, and Mr. Creel, Mr. Johnson, Mr. Brooks and Mr. Pitz are, paid in U.S. dollars and
their amounts have been converted using the following average exchange rates: $1.2957 for 2018, $1.2986 for 2017, $1.3248 for 2016, $1.2787 for 2015 and $1.1045 for 2014  39




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##### Table of Contents

EXECUTIVE COMPENSATION DETAILS Summary compensation table The table below shows compensation for our five named executives for the three fiscal years ended December 31, 2018. For all the named executives except Mr. Velani, their compensation has been converted to Canadian dollars using the average exchange rates for the year: $1.2957
for 2018, $1.2986 for 2017 and $1.3248 for 2016.  Non-equity Incentiveplan compensation($)Name and principal position

Year


Salary ($)


Share-basedawards
($)


Option-basedawards
($)


Annualincentiveplans


Long-termincentiveplans


Pensionvalues($)


All othercompensation($)


Totalcompensation($)Keith E. Creel


2018



1,453,595



4,369,757



2,519,163



3,148,551



-



452,209



543,332



12,486,607President and Chief


2017



1,436,594



4,407,788



10,516,630



2,419,292



-



398,894



926,402



20,105,600Executive Officer


2016



1,261,123



2,403,912



2,131,126



1,900,765



-



348,529



833,257



8,878,712Nadeem S. Velani


2018



666,946



1,199,385



688,327



1,032,596



-



138,925



57,680



3,783,859Executive Vice-President


2017



451,355



806,073



202,650



490,763



-



101,027



49,523



2,101,391and Chief Financial Officer


2016



298,838



131,634



105,305



373,500



-



49,682



42,015



1,000,974Robert A. Johnson


2018



572,808



950,363



547,936



778,392



-



105,825



63,858



3,019,182Executive Vice-President,


2017



564,891



958,705



556,073



597,372



-



114,037



54,819



2,845,897Operations


2016



532,056



358,674



317,991



648,324



-



86,189



54,931



1,998,165John K. Brooks


2018



499,384



424,798



244,922



602,177



-



166,898



61,456



1,999,635Senior Vice-President and


2017



436,359



428,442



125,582



420,251



-



144,378



59,567



1,614,579Chief Marketing Officer


2016



344,448



188,819



100,674



310,003



-



93,143



36,365



1,073,452Laird J. Pitz


2018



482,486



444,139



256,132



560,593



-



87,126



42,346



1,872,822Senior Vice-President


2017



457,901



394,237



228,694



435,601



-



82,361



41,137



1,639,931and Chief Risk Officer


2016



437,720



397,394



279,071



417,312



-



74,178



41,203



1,646,878 Notes: Salary Salary earned during the year. Salary differs from annualized salary because annual increases generally go into effect on April 1. Mr. Velanis salary is
set in U.S. dollars and was paid based on a foreign exchange rate of $1.2959. Share-based awards PSUs were granted on February 15, 2018. The 2018 grant date accounting fair value of the awards shown in the summary compensation table is $230.12 per share
granted on the TSX or $184.29 per share granted on the NYSE in accordance with FASB ASC Topic 718: Compensation  Stock Compensation. See Item 8, Financial Statements and Supplementary Data, Note 22: Stock-based compensation in our
annual report on Form 10-K filed with the SEC on February 15, 2019 for more details. To calculate the number of PSUs
granted to a named executive, we use the Willis Towers Watson expected life binomial methodology. Using this methodology, the grant date expected fair value was $186.40 on the TSX and US$149.27 on the NYSE. The Willis Towers Watson expected life
binomial methodology for the PSUs are calculated based on the following assumptions:  Assumptions

Willis Towers Watson expected life binomial valuationTSX / NYSETerm

3 yearsVesting Schedule

3 year cliffPayout Range %
(threshold-target-max)

50-100-200Risk of Forfeiture

5%PSU Value
(as a % of grant price)

81%  40




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##### Table of Contents

Option awards Stock
options were granted on January 22, 2018. The grant date fair value of stock option awards granted to each named executive has been calculated in accordance with FASB ASC Topic 718: CompensationStock Compensation. We used the
Black-Scholes option-pricing model (with reference to the shares underlying the options). The grant date accounting fair value of the awards shown in the summary compensation table is $51.91 per share granted on the TSX or $45.06 per share granted
on the NYSE. See Incentive plan awardson page 22 for details about the 2018 awards. See Item 8, Financial Statements and Supplementary Data, Note 22: Stock-based compensation in our annual report on Form
10-K filed with the SEC on February 15, 2019 for more details. To calculate the number of options that an executive
receives, we use Willis Towers Watsons expected life binomial methodology which is fundamentally similar to the methodology used to determine the accounting fair value; however, some of the underlying assumptions are different. For example,
the binomial methodology assumes a slightly lower historical volatility, a higher risk-free rate and includes a discount to account for vesting restrictions. The
grant price on January 22, 2018 was $231.66 on the TSX with an underlying value of $48.65 and was US$185.85 on the NYSE with an underlying value of US$42.75. The Willis Towers Watson expected life binomial methodology for the stock options are
calculated based on the following assumptions:  Assumptions

Willis Towers Watson expected life binomial valuationNYSE


TSXOption Term


7 years



7 yearsVesting Schedule


4 year pro-rated



4 year pro-ratedExpected Life


4.75 years



4.75 yearsDividend Yield
(1-year historical)


1.00%



0.99%Volatility
(3-year daily)


24.0%



21.7%Risk-free Rate
(yield curve)


2.5 - 3.1%



2.0 - 2.5%Risk of Forfeiture


5%



5%Stock Option Value
(as a % of grant price)


23%



21% Non-equity incentive plan compensation Cash bonus earned under our short-term incentive plan for 2018 and paid in February 2019. In respect of their short-term incentive compensation, Mr. Velani and
Mr. Brooks elected to receive part of their 2018 bonus in DSUs once the bonus is paid out. Pension value Mr. Creel and Mr. Velani participate in the Canadian defined contribution plan and in the defined contribution supplemental plan. Mr. Creel, Mr. Johnson and Mr. Pitz participate in the U.S. defined contribution plan and the U.S. supplemental executive retirement plan. Mr. Brooks participates in the CP pension plan for U.S. Management Employees See Retirement planson page 47 for more details.  41




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##### Table of Contents

All other compensation The named executives also receive certain benefits and perquisites which are competitive with our comparator group. The table below shows the breakdown of all other
compensation for 2018. The values in the table have been converted to Canadian dollars using the 2018 average exchange rate of $1.2957.  Perquisites


OthercompensationName

Personaluse ofcompanyaircraft


Autobenefits


Housingallowance


Financialand taxplanning


Additionalmedical


Clubbenefits


401Kmatch


Employersharepurchaseplanmatch


TotalKeith Creel


411,562



28,992



18,443



32,393



1,322



14,761



6,997



28,862



543,332Nadeem Velani


-



31,226



-



-



2,048



11,200



-



13,206



57,680Robert Johnson


-



27,997



-



-



867



14,512



9,140



11,342



63,858John Brooks


-



26,949



-



-



1,042



14,512



9,151



9,802



61,456Laird Pitz


-



19,256



-



-



-



14,512



8,578



-



42,346 Notes:  Use of company aircraft

The value is calculated by multiplying the variable cost per air hour by the
number of hours used for travel and includes costs for fuel, maintenance, landing fees and other miscellaneous costs. As an executive of a Calgary-based company, enabling the CEO to visit his family in the Eastern and Southern United States is an
important retention tool. Non-corporate use of the corporate jet has been limited to family visits and limited to the CEO only.Auto benefits

Includes a company-leased vehicle and reimbursement of related operating costs as well as taxable
reimbursement of auto benefits for eligible vehicles.Housing allowance

The incremental cost to provide reasonable accommodation for Mr. Creel in Calgary.Financial and tax planning

For Mr. Creel, financial and tax planning services according to his current contract.Additional Medical

CP encourages executives to participate in the executive medical program. Under the U.S. medical benefit
plan, available to all U.S. employees, the majority of the cost of a medical examination is covered by the plan. Only additional services for the executive medical are paid for by CP. In Canada, executive medicals are not covered under any general
benefit plan.Club memberships

Included in the perquisites program available to all senior executives.401K plan

Mr. Creel, Mr. Johnson, Mr. Brooks and Mr. Pitz also receive matching contributions to
the 401k plan.ESPP match

Includes company contributions to the employee share purchase plan (ESPP). The named executives participate
in the ESPP on the same terms and using the same formulas as for other participants. See page 46 to read more about the ESPP. Employment agreements Except for
Mr. Creel, employment agreements for executive officers are set out in a standard offer letter template. The letters contain the standard terms as described in the CD&A and include an annual salary, participation in the short- and long-term
incentive plans as approved annually by the Compensation Committee, participation in the benefit plans or programs generally available to management employees, and modest perquisites. As of the publication of this proxy circular, all of our NEOs, have a two-year
non-compete, non-solicitation agreement tied to their CP employment. Mr. Creels employment agreement includes: 

reasonable living accommodation in Calgary 

use of the corporate jet for business commuting and family visits within North America 

non-disclosure, non-solicitation covenants 

severance provisions as described on page 49 

reimbursement for club memberships of up to US$25,000 annually 

reimbursement for financial services of up to US$25,000 annually  42




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##### Table of Contents

Incentive plan awards Outstanding share-based awards and option-based awards The table below shows all vested and unvested equity incentive awards that were outstanding as of December 31, 2018. See Long-term incentivesbeginning on
page 19 for more information about our stock option and share-based awards.  Option-based awards




Share-based awardsName

Grant date


Number
ofsecuritiesunderlyingunexercisedoptions (#)


Optionexerciseprice
($)


Option
expirationdate


Value ofunexercisedin-the-moneyoptions ($)


Granttype

Number ofshares or unitsof shares
thathave notvested (#)


Market orpayout value ofshare-basedawards thathave not vested
($)


Market or payoutvalue of
vestedshare-basedawards not paidout or distributed ($)Keith Creel


4-Feb-2013



59,325



115.78



4-Feb-2023



7,502,24022-Feb-2013



53,350



119.18



22-Feb-2023



6,565,25131-Jan-2014



39,900



168.84



31-Jan-2024



2,928,66024-Jul-2014



47,940



210.32



24-Jul-2024



1,530,24523-Jan-2015



33,910



175.92



23-Jan-2025



78,64222-Jan-2016



55,250



116.80



22-Jan-2026



4,584,12820-Jan-2017



33,884



150.99



20-Jan-2024



1,230,9601-Feb-2017



18,762



151.14



1-Feb-2024



677,7591-Feb-2017



177,225



151.14



1-Feb-2024



6,402,07922-Jan-2018



43,148



185.85



22-Jan-2025



-6-Feb-2013


















DSU










7,639,98323-Feb-2016


















PSU










7,171,36521-Feb-2017


















PSU


22,691



5,498,15315-Feb-2018


















PSU


18,437



4,467,496Total






562,694











31,499,964





41,128



9,965,649



14,811,348Nadeem Velani


2-Apr-2013



2,310



126.34



2-Apr-2023



267,72931-Jan-2014



1,820



168.84



31-Jan-2024



133,58823-Jan-2015



1,539



218.78



23-Jan-2025



36,10522-Jan-2016



2,927



165.74



22-Jan-2026



223,91620-Jan-2017



4,644



201.49



20-Jan-2024



189,24322-Jan-2018



13,260



231.66



22-Jan-2025



140,29126-Feb-2014


















DSU










162,10619-Feb-2015


















DSU










82,01624-Feb-2017


















DSU


123



29,760



119,04123-Feb-2016


















PSU










369,99221-Feb-2017


















PSU


3,973



962,32815-Feb-2018


















PSU


5,251



1,272,015Total






26,500











990,872





9,347



2,264,103



733,155Robert Johnson


2-Jul-2013



3,640



129.54



2-Jul-2023



410,22831-Jan-2014



5,870



168.84



31-Jan-2024



430,85823-Jan-2015



5,198



175.92



23-Jan-2025



12,05522-Jan-2016



8,244



116.80



22-Jan-2026



684,01020-Jan-2017



11,557



150.99



20-Jan-2024



419,85022-Jan-2018



9,385



185.85



22-Jan-2025



-24-Jun-2013


















DSU










1,361,63027-Feb-2018


















DSU


160



38,713



154,85223-Feb-2016


















PSU










1,070,18521-Feb-2017


















PSU


4,935



1,195,86215-Feb-2018


















PSU


4,010



971,619Total






43,894











1,957,001





9,105



2,206,194



2,586,667John Brooks


25-Feb-2010



900



51.17



25-Feb-2020



171,96324-Feb-2011



3,200



65.06



24-Feb-2021



566,9761-Apr-2012



2,850



75.71



1-Apr-2022



474,6117-Dec-2012



2,345



97.70



7-Dec-2022



338,94622-Feb-2013



1,900



119.18



22-Feb-2023



233,81431-Jan-2014



1,440



168.84



31-Jan-2024



105,69623-Jan-2015



2,506



175.92



23-Jan-2025



5,81222-Jan-2016



4,340



116.80



22-Jan-2026



360,09320-Jan-2017



2,610



150.99



20-Jan-2024



94,81822-Jan-2018



4,195



185.85



22-Jan-2025



-6-Sep-2012


















DSU










242,01423-Feb-2016


















PSU










563,48821-Feb-2017


















PSU


2,206



534,42615-Feb-2018


















PSU


1,792



434,29926,286











2,352,729





3,998



968,725



805,502  43




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##### Table of Contents

Option-based awards




Share-based awardsName

Grant date


Number
ofsecuritiesunderlyingunexercisedoptions (#)


Optionexerciseprice
($)


Option
expirationdate


Value ofunexercisedin-the-moneyoptions ($)


Granttype

Number ofshares or unitsof shares
thathave notvested (#)


Market orpayout value ofshare-basedawards thathave not vested
($)


Market or payoutvalue of
vestedshare-basedawards not paidout or distributed ($)Laird Pitz


23-Jan-2015



4,584



175.92



23-Jan-2025



10,63122-Jan-2016



5,426



116.80



22-Jan-2026



450,19920-Jan-2017



4,753



150.99



20-Jan-2024



172,67022-Jan-2018



4,387



185.85



22-Jan-2025



-19-Feb-2015


















DSU










428,96123-Feb-2016


















DSU


524



126,954



507,81723-Feb-2016


















PSU










938,98321-Feb-2017


















PSU


2,029



491,76115-Feb-2018


















PSU


1,874



454,073Total






19,150











633,500





4,427



1,072,788



1,875,761 Notes: Options In general, regular options granted before 2017 vest 25% each year for four years beginning on the anniversary of the grant date and expire 10 years from the grant
date. Grants made in 2017 and onwards expire 7 years from the grant date. All exercise prices for grants received prior to 2015 are shown in Canadian dollars.
With respect to Mr. Creel, Mr. Johnson, Mr. Brooks and Mr. Pitz, exercise prices for option awards that were granted in 2015 or later are shown in U.S. dollars. Prior to 2015, all exercise prices are in Canadian dollars and all
of Mr. Velanis exercise prices are shown in Canadian dollars. Value of unexercised
in-the-money options at 2018 year-end Based on $242.24, our closing share price on the TSX on December 31, 2018. For all the named executives, except Mr. Velani, option awards made in 2015 or
later have been valued based on US$177.62, our closing share price on the NYSE on December 31, 2018 and converted into Canadian dollars using a year-end exchange rate of $1.3642. Mr. Creel was awarded performance stock options on July 24, 2014. These options vested upon meeting certain performance hurdles: 50% of the options vested
upon CP achieving an annual operating ratio of 63%, and the other 50% vested upon CP achieving an annual operating income of $2,618 million. The options became exercisable on June 1, 2018. Mr. Creel was also awarded performance stock options on February 1, 2017. These options will vest on February 1, 2022 provided certain performance
metrics are achieved. The amount reflects the market value of performance stock options that have not vested based on US$177.62, our closing share price on the NYSE on December 31, 2018 and converted into Canadian dollars using a year-end exchange rate of $1.3642. For Mr. Velani, the value of unvested PSUs and DSUs is based on $242.24, our closing
share price on the TSX on December 31, 2018. Mr. Creel, Mr. Johnson, Mr. Brooks and Mr. Pitz: the value of PSUs or DSUs is based on
US$177.62, our closing share price on the NYSE on December 31, 2018, converted into Canadian dollars using a year-end exchange rate of $1.3642. PSUs assume a payout at target (100%) for the 2017 and 2018 grants. The 2016 PSU value reflects a payout at 177% on the award which includes dividends earned up to the
payment date. Vested and unvested DSU awards are deferred and cannot be redeemed until the executive leaves the company.  44




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##### Table of Contents

Incentive plan awards  value vested or earned during the year The table below shows the amount of incentive compensation that vested or was paid in 2018.  Name

Option-based awards
-value vested during the year ($)


Share-based awards
-value vested during the year ($)


Non-equity incentive plan compensation -value earned during the year ($)Keith Creel


3,905,340



7,171,365



3,148,551Nadeem Velani


145,738



386,050



1,032,596Robert Johnson


386,683



1,220,335



778,392John Brooks


141,622



563,488



602,177Laird Pitz


239,420



1,022,962



560,593 Notes: Share-based awards  value vested
during the year The value includes DSUs that have vested during the year and are valued on the day of vesting, as well as the 2016 PSUs that vested at 177% on
December 31, 2018 including dividends earned up to the payment date. The PSU value realized on vesting is calculated by multiplying the number of shares
acquired on vesting by $259.49, the average 30-day trading price of our shares prior to December 31, 2018 on the TSX for Mr. Velani, and US$194.42 on the NYSE for Mr. Creel, Mr. Johnson,
Mr. Brooks and Mr. Pitz converted to Canadian dollars using the year-end exchange rate of $1.3642 and by multiplying that product by the achieved performance factor. Option exercises and vested stock awards The
table below shows the options exercised and sold by the named executives in 2018.  Name

Number of options exercised and sold


Option exercise price ($)


Value realized ($)Keith Creel


60,000



115.78



9,567,201Nadeem Velani


0



0



0Robert Johnson


0



0



0John Brooks


0



0



0Laird Pitz


3,150



187.00



260,295 Value realizedis calculated using the actual market price of the shares acquired upon exercise of the respective options less
the exercise price for those options. The values are in Canadian dollars. Equity compensation plan information The table below shows the securities authorized for issuance under equity compensation plans at December 31, 2018. These include the issuance of securities upon
exercise of options outstanding under the management stock option incentive plan and the director stock option plan. The table also shows the remaining number of
shares available for issuance and includes 340,000 shares under the director stock option plan. On July 21, 2003, the Board suspended any additional grants of options under the director stock option plan and there are no outstanding options
under that plan.  Plan Category

Number of securities to
be issued upon exercise of
outstanding options, warrants and rights


Weighted-average
exercise price of
outstanding options,
warrants and rights ($)


Number of securities remaining
available for future issuance under equity
compensation plans (excluding securities
reflected in the first column)Equity compensation plans approved by security holders


1,533,598



176.02



1,641,047Equity compensation plans not approved by security holders


-



-



-Total


1,533,598



176.02



1,641,047  45




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##### Table of Contents

The number of securities to be issued upon exercise of outstanding options, warrants and rights in the previous table
includes 59,325 unexercised options granted as a stand-alone award to Mr. Creel in 2013. See page 22 to read more about the management stock option incentive plan. You can also read about the two equity compensation plans in our audited consolidated
financial statements for the year ended December 31, 2018, available on our website (investor.cpr.ca/financials), and on SEDAR (www.sedar.com) and EDGAR (www.sec.gov). Employee Share Purchase Program CPs
ESPP is available to all employees and provides the opportunity to purchase voting shares on the open market through payroll deductions which aligns employees interests with those of shareholders. Employees may contribute between 1% and 10% of
their base salary to the ESPP every pay period. CP provides a 33% match on the first 6% of non-unionized and specified unionized employees contributions which vest at the end of the four consecutive
quarters. Employees must remain participants of the ESPP at the time of vesting in order to receive the CP match. As of December 31, 2018, approximately 41%
of employees participated in ESPP.  46




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##### Table of Contents

Retirement plans Canadian pension plans Mr. Creel and
Mr. Velani participated in our defined contribution plan (DC plan) in 2018. Participants contribute between 4% and 6% of their earnings depending on their
age and years of service, and the company contributes between 4% and 8% of earnings. Total contributions are limited to the maximum allowed under the Income Tax Act(Canada) ($26,500 for 2018). Defined contribution plan table  Accumulated value at start of year ($)


Compensatory ($)


Accumulated value at year end ($)Keith Creel


842,518



430,053



1,262,991Nadeem Velani


315,592



138,925



455,364 Mr. Creel and Mr. Velani also participate in a defined contribution supplemental plan (DC SERP), a non-registered plan that provides benefits in excess of the Income Tax Act(Canada) limits for the DC plan. Specifically, the DC SERP provides a company contribution equal to 6% of a participants base
salary and annual bonus. Company contributions vest after two years and employees do not contribute to the plan. U.S. retirement plans Our U.S. retirement program has five elements: 

a qualified defined benefit pension plan which provides automatic employer contributions (closed plan) 

a non-qualified defined benefit pension plan (closed plan)for certain
employees whose compensation exceeds the U.S. Internal Revenue Code(the Code) limits (US$220,000 for 2018) 

a voluntary qualified 401(k) plan with employer match 

a qualified defined contribution plan which provides automatic employer contributions 

a non-qualified defined contribution plan for certain employees whose compensation
exceeds the Codelimits (US$275,000 for 2018) CP Pension Plan for U.S. Management Employees (closed plan) CP sponsors a defined benefit pension plan comprised of a Basic Defined Benefit Pension Plan (Basic DB Plan) and a Supplemental Pension (Supplemental Pension Plan) for
earnings in excess of the IRS compensation limits in the Basic DB Plan, which provides retirement benefits in excess of the benefits payable from the Basic DB Plan. The benefit is based on age, service and a percentage of final average compensation. The pension formula uses the final average monthly earnings and calculates a benefit of 0.5% up to the Tier 1 Railroad Retirement Board limit and 1.25% in excess
of that limit, and multiplies that by the years of service to a maximum of 30 years. An unreduced pension is available for all employees under this plan as early as age 62 with 30 years of service with the normal retirement benefit payable at
age 65. Mr. Brooks participated in the Basic DB Plan in 2018.  Years of credited service


Annual benefits payable


Opening presentvalue of definedbenefit obligation($)


Compensatorychange($)


Non-Compensatorychange($)


Closing presentvalue of definedbenefitobligation($)Name

At
December 31, 2018


At age 65


At year end($)


At age 65($)John Brooks


10.17



27.25



81,285



217,800



477,084



166,898



(72,711
)


571,271 401(k) plan Individuals can make pre-tax contributions to the 401(k) plan subject to limitations imposed by the U.S. Internal Revenue Service. The company provides a matching contribution of 50% on the first 6% of eligible earnings. All
contributions vest immediately.  47




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##### Table of Contents

U.S. Salaried Retirement Income Plan The U.S. Salaried Retirement Income Plan is employer-funded with an annual contribution amount equal to 3.5% of eligible earnings, which include base salary and annual
bonus. These earnings are subject to compensation limitations imposed by the IRS in the U.S. These amounts are included in the summary compensation table under All other compensation. Supplemental defined contribution plan (U.S. DC SERP) The U.S. DC SERP is
an unfunded, non-qualified defined contribution plan that provides an additional company contribution equal to 6% of eligible earnings without regard to the limitations imposed by the IRS in the U.S. Eligible
earnings include base salary and annual bonus. In addition, for earnings in excess of the limitations imposed by the U.S. Internal Revenue Code, an additional 3.5% contribution is made. Company contributions cliff vest at the end of three years. Mr. Creel, Mr. Johnson and Mr. Pitz participate in the U.S. DC SERP in 2018. The table below shows the U.S. Salaried Retirement Income Plan and U.S. DC SERP account information in 2018.  Accumulated value at start of year ($)


Compensatory ($)


Accumulated value at year end ($)Keith Creel


844,355



22,156



821,911Robert Johnson


298,426



105,825



391,619Laird Pitz


187,392



87,126



261,149 The values in the table have been converted to Canadian dollars using the 2018 average exchange rate of $1.2957. About deferred compensation Executive officers
and members of senior management who have not met their share ownership requirement can choose to defer all or part of their short-term incentive by receiving it as deferred share units. They cannot defer more than the amount needed to meet the
requirement, which includes our 25% match of the amount deferred in the year the bonus is actually paid. The matching units vest after three years. Elections must
be made before the beginning of the new fiscal year. The amount is converted to DSUs using the average market price of a CP common share for the 10 trading days immediately before December 31 of the performance year. The table below shows the number of DSUs outstanding and their value based on our closing share price on December 31, 2018.  Unvested DSUs (#)


Vested DSUs (#)


Total units
($)


Value as at
December 31, 2018 ($)Keith Creel


-



31,530



31,530



7,640,009Nadeem Velani


123



1,499



1,622



392,913Robert Johnson


160



6,258



6,418



1,555,140John Brooks


-



999



999



242,067Laird Pitz


524



3,866



4,390



1,063,737 We valued the outstanding DSUs using $242.24, our closing share price on the TSX on December 31, 2018 for Mr. Velani, and
US$177.62, our closing share price on the NYSE and converted to Canadian dollars using a year-end exchange rate of $1.3642 for Mr. Creel, Mr. Johnson, Mr. Brooks and Mr. Pitz. DSUs are redeemed for cash six months after the executive retires or leaves the company, or up until the end of the following calendar year for Canadian executives.
U.S. executives who participate in the DSU plan must redeem their DSUs after the six-month waiting period to be in compliance with U.S. tax regulations. We use the average market price of a CP common share for
the 10 trading days immediately before the payment date to calculate the amount, which the participant receives in a lump sum.  48




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##### Table of Contents

Termination and change in control Termination of employment We have policies to
cover different kinds of termination of employment. Mr. Creel is covered under the terms of his employment agreement effective January 31, 2017, as
amended December 18, 2018 with terms effective as of January 1, 2019, that includes non-competition, non-solicitation and confidentiality restrictions.
Mr. Velani, Mr. Johnson, Mr. Brooks and Mr. Pitz are subject to the same terms as all other employees for voluntary termination, retirement, termination for cause and change in control, however, Mr. Velani, Mr. Brooks
and Mr. Pitz signed a non-competition, non-solicitation agreement in 2018 that also had confidentiality restrictions.  Resignation

Retirement

Termination
with cause

Termination without cause

Change in controlSeverance

None

None

None

Mr. Creel: 24 months of base salary
 Other named executives: per legislative requirements

NoneShort-term incentive

Forfeited

Award for current year is pro-rated to retirement date

Forfeited

Equal to the target award for severance period for Mr. Creel Other named executives: award for current
year is pro-rated to termination date as per plan

NoneDSUs

Unvested DSUs are forfeited

Unvested DSUs are forfeited

Unvested DSUs are forfeited

Unvested DSUs are forfeited

Unvested units vest early if the holder is terminated following change in controlPerformance share units

Forfeited

Award continues to vest based on performance factors and executive is entitled to receive the full value as
long as they have worked for six months of the performance period, otherwise the award is forfeited

Forfeited

Pro-rated based on active service within the performance period

Only vest if the executive is terminated following a change in control PSUs vest at target, pro-rated based on active service within the performance periodStock options

Vested options are exercisable for 30 days or until the expiry date, whichever comes first
 Unvested options are forfeited Performance stock options are forfeited

Options continue to vest
 Award expires five years after the retirement date or the normal expiry date, whichever is
earlier Performance stock options are forfeited

Forfeited

Vested options are exercisable for six months following termination as well as any options that vest during
the six-month period Performance stock options are forfeited

Options only vest early if the option holder is terminated following the change in control
Performance stock options are forfeitedPension

No additional value

No additional value

No additional value

No additional value

No additional valueESPP shares

Unvested shares are forfeited

Unvested shares vest

Unvested shares are forfeited

Unvested shares vest

Unvested shares vestBenefits

End on resignation

Post-retirement life insurance of $50,000 and a health spending account based on years of service (same for
all employees)

End on resignation

None

NonePerquisites

Any unused flex perquisite dollars are forfeited

Any unused flex perquisite dollars are forfeited

Any unused flex perquisite dollars are forfeited

Any unused flex perquisite dollars are forfeited

Any unused flex perquisite dollars are forfeited  49




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##### Table of Contents

The next table shows the estimated incremental amounts that would be paid to Mr. Creel if his employment had
been terminated without cause on December 31, 2018. There is no excise tax gross-up provision for any termination benefit.  Severance paymentName

Severance period(# of months)


Base pay($)


Short-termincentive($)


Additionalretirementbenefits($)


Otherbenefits($)


Value of vestingof options
andequity-basedawards($)


Payable onterminationwithoutcause($)Keith Creel


24



3,069,450



3,683,340



-



32,251



6,797,388



13,582,429 Notes: 

Other benefitsinclude the value of accelerated vesting of shares purchased under the Employee Share Purchase Plan 

Value of vesting of options and equity-based awardsis the value of options vesting within six months following
termination in accordance with our stock option plan, and the prorated value as of the termination date of PSU awards. It is based on $242.24, our closing share price on the TSX on December 31, 2018 and US$177.62, the closing price of our
shares on the NYSE, converted into Canadian dollars using a year-end exchange rate of 1.3642  50




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##### Table of Contents

Director compensation  Our director compensation program shares the same objective as our executive compensation program: to attract and retain qualified
directors and to align the interests of directors and shareholders.  Flat fee
retainer We pay directors a flat fee, which reflects the directors ongoing oversight and responsibilities throughout the year and attendance at Board and
committee meetings.





Aligning director and
shareholder interests Directors receive their annual retainer in
deferred share units so they have an ongoing stake in our future success, aligning their interests with those of our shareholders. 
About DDSUs DDSUs are granted to directors under
the director deferred share unit plan. Only non-employee directors participate in the plan. 
A DDSU is a bookkeeping entry that has the same value as one CP common share. DDSUs earn additional units as dividend equivalents at the same rate as dividends paid on
our shares. Directors receive a cash amount for their DDSUs, one year after they leave the Board, based on the market value of our shares at the time of redemption, less any withholding taxes.Directors receive 100% of their annual retainer in Director Deferred Share Units (DDSUs) until they have met their share ownership
requirements. After that they must receive at least 50% of their retainer in DDSUs, and can receive the balance in cash. Directors must make their election before the beginning of each calendar year.
 Directors must meet their share ownership requirements within five years of joining the Board,
and must hold their DDSUs for one year after they retire from the Board.  The table below
shows the flat fee retainers for 2018. In 2018, Canadian directors fees were converted to Canadian dollars and the number of DDSUs received was based on the trading price of our shares on the TSX. U.S. directors were paid in U.S. dollars and
the number of DDSUs they received was based on the trading price of our shares on the NYSE.Annual RetainerBoard Chair
retainer

US$395,000Director retainer

US$200,000Committee chair
retainer

US$  30,000 We reimburse directors for travel and out-of-pocket
expenses related to attending their Board and committee meetings and other business on behalf of CP. Mr. Creel does not receive any director compensation
because he is compensated in his role as President and CEO. Benchmarking Similar to executive compensation, we benchmark director compensation so we can attract the right director talent and be competitive with the market. We amended our
peer group to consist of twelve capital-intensive Canadian companies as follows:  Cenovus Energy Inc. Enbridge Inc.
Imperial Oil Limited BCE Inc.
GoldCorp Inc. Fortis Inc.

TransCanada Corporation Telus Corporation
Rogers Communications Inc. Barrick Gold Corporation
Kinross Gold Corporation Suncor Energy Inc. We also look at the director compensation of the Class 1 railroads as a secondary reference. Independent advice The Governance Committee may engage an independent
consultant with respect to director compensation. The Governance Committee makes its own decisions, which may reflect factors and considerations other than the information and recommendations provided by its external consultant. The Governance
Committee did not engage an external compensation consultant in 2018. 2018 director compensation We paid directors a total of approximately $2,524,539 in 2018 as detailed in the table below. Directors receive a flat fee retainer to cover their ongoing oversight
and responsibilities throughout the year and their attendance at Board and committee meetings. Directors receive 100% of their annual retainer in director
deferred share units (DDSUs) until they have met their share ownership requirements. After that, directors are required to receive at least 50% of their compensation in DDSUs. The total represents the approximate dollar value of DDSUs credited to
each directors DDSU account in 2018, based on the closing fair market value of our common shares on the grant date plus the cash portion paid where a director elected to receive a portion of compensation in cash. Mr. Creel does not receive director compensation because he is compensated in his role as President and CEO (see pages 26 to 30 for details).  Name

Feesearned
($)


Share-basedawards(2)(4) ($)


Option-basedawards
($)


Non-equity incentiveplan compensation
($)


Pensionvalue
($)


All othercompensation(3) ($)


Total
($)John Baird


-



262,849



-



-



-



1,000



263,849Isabelle Courville(1)


151,366



151,138



-



-



-



1,000



303,504Jill Denham


-



262,849



-



-



-



1,000



263,849Rebecca MacDonald


-



302,276



-



-



-



1,000



303,276Edward Monser(5)


-



10,611



-



-



-



1,000



11,611Matthew Paull


-



298,909



-



-



-



1,000



299,909Jane Peverett


-



302,276



-



-



-



1,000



303,276Andrew Reardon


-



513,344



-



-



-



1,000



514,344Gordon Trafton


-



259,921



-



-



-



1,000



260,921 Notes: (1)
Until the end of 2018, Ms. Courville elected to receive 50% of her annual director compensation in DDSUs with the
remaining 50% paid in cash. (2)
The value of the share-based awards has been calculated in accordance with Financial Accounting Standards Board Accounting
Standards Codification Topic 718 (FASB ASC 718) using the grant date fair value, which is prescribed by the DDSU plan. (3)
Each director was provided with a $1,000 donation to the charity of their choice in December 2018 in gratitude for their
year of service. This amount appears under All other compensation. (4)
All directors were paid in U.S. dollars and the value of their share-based awards, and cash payments, as applicable, have
been converted to Canadian dollars using the 2018 average exchange rate of $1.2957. (5)
Mr. Monser joined the Board in December, 2018. His 2018 compensation was
pro-rated accordingly. The Governance Committee reviews director compensation every two to three years
based on the directors responsibilities and time commitment and the compensation provided by comparable companies. Each director is paid an annual retainer of US$200,000. Committee chairs receive an additional US$30,000 per year and the Board
Chair receives an annual retainer of US$395,000. No changes were made to the director compensation program in 2018.  51




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##### Table of Contents

Incentive plan awards Outstanding share-based awards and option-based awards The table below shows all vested and unvested equity incentive awards that are outstanding as of December 31, 2018.  Option-based awards




Share-based awardsName

Number
ofsecuritiesunderlyingunexercisedoptions (#)


Optionexerciseprice
($)


Option
expirationdate


Value ofunexercisedin-the-moneyoptions ($)


Granttype

Number ofshares or unitsof shares
thathave notvested (#)


Market orpayout value ofshare-basedawards thathave not vested
($)


Market or payoutvalue of vestedshare-basedawards not paidout or distributed
($)(1)John Baird


-



-



-



-


-


-



-



1,059,316Isabelle Courville


-



-



-



-


-


-



-



1,704,158Jill Denham


-



-



-



-


-


-



-



631,520Rebecca MacDonald


-



-



-



-


-


-



-



2,568,228Edward Monser


-



-



-



-


-


-



-



11,146Matthew Paull


-



-



-



-


-


-



-



1,126,253Jane Peverett


-



-



-



-


-


-



-



612,625Andrew Reardon


-



-



-



-


-


-



-



3,098,650Gordon Trafton


-



-



-



-


-


-



-



617,646  (1)
Calculated based on the closing price of our shares on December 31, 2018 on the TSX ($242.24), in the case of
directors resident in Canada, and on the NYSE (US$177.62) which was converted to Canadian dollars using the year-end exchange rate of $1.3642, in the case of the directors resident in the U.S.  52




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##### Table of Contents

ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Equity Compensation Plan Information See Item 11
 Executive CompensationEquity Compensation Plan Information for information regarding our equity compensation plans on page 6.  Beneficial Ownership Table The table below sets forth the number and
percentage of outstanding shares of our common stock beneficially owned by each person, or group of persons, known by Canadian Pacific based on publicly available information as of April 17, 2019, to own beneficially more than five percent of
our common stock, each of our directors, each of our NEOs and all directors and executive officers as a group.  Name of beneficial owner

Shares ofcommon stockbeneficiallyowned


Percent ofcommon stockoutstanding


Additionalunderlyingshares(d)John Baird(a)










Isabelle Courville(a)


900



*



Jill Denham(a)










Rebecca MacDonald(a)










Edward Monser(a)










Matthew Paull(a)


3,000



*



Jane Peverett(a)










Andrew Reardon(a)


453



*



Gordon T. Trafton(a)










Keith Creel(b)


3,118



*



312,974John Brooks(b)


1,904



*



20,751Robert Johnson(b)


590



*



29,071Laird Pitz(b)


67



*



11,676Nadeem Velani(b)


1,090



*



13,502TCI Fund Management Limited(c)


7,835,316



5.58
%


All current executive officers and directors as a group


402,806



*



N/A  *
Represents less than one percent of the outstanding common stock. (a)
See Directors Profiles in Item 10. Directors, Executive Officers and Corporate Governance above for
disclosure with respect to DDSUs. The address of each director is c/o Canadian Pacific, 7550 Ogden Dale Road S.E., Calgary, Alberta, T2C 4X9. (b)
See Compensation Details  Deferred Compensation Plans in Item 11. Executive Compensation, for
disclosure with respect to NEO DSUs. The address of each executive officer is c/o Canadian Pacific, 7550 Ogden Dale Road S.E., Calgary, Alberta, T2C 4X9. (c)
Based upon statements in the Schedule 13G filed by TCI Fund Management Limited (TCI Fund) and Christopher
Hohn on February 14, 2019, TCI Fund and Mr. Hohn have (i) shared voting power over 7,835,316 shares of CPs common stock; and (ii) shared dispositive power of 7,835,316 shares of CPs common stock. The Childrens
Investment Master Fund (TCIF) is the investment manager of TCI Fund and Talos Capital DAC (Talos). Mr. Hohn, as managing director of TCIF, may be deemed to beneficially own the shares held by the TCI Fund and Talos. The
address of each of TCI Fund and Mr. Hohn is 7 Clifford Street, London W1S 2FT, United Kingdom. (d)
Represents stock options held that were exercisable as of April 17, 2019 or within 60 days thereafter.  53




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##### Table of Contents

ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Related party transactions Directors, officers and employees are required
to report any related party transactions to comply with our code of business ethics. In 2018, there were no transactions between CP and a related person as
described in Item 404 of Regulation S-K, which defines a related person as:  

a director, nominated director or executive officer of CP, 

an immediate family member of a director, nominated director or executive officer, or 

someone who beneficially owns more than 5% of our shares or a member of their immediate family. Any director who has a material interest in a transaction or agreement involving CP must disclose the interest to the CEO and the Chair of the Board immediately, and
does not participate in any discussions or votes on the matter. The Board reviews related party transactions when it does its annual review of director
independence. Our accounting and legal departments review any related party transactions reported by officers and employees. Independence The Board has adopted standards for director independence based on the criteria of the NYSE, SEC and CSA. It reviews director independence continually and annually using director questionnaires as well as by reviewing updated biographical information, meeting with
directors individually, and conducting a comprehensive assessment of all business and other relationships and interests of each director with respect to CP and our subsidiaries. In 2018, the Board determined that each director, except for
Mr. Creel, is independent in accordance with the standards for independence established by the NYSE and NI 58-101 Disclosure of Corporate Governance Practices. Mr. Creel is not independent because of
his position as President and Chief Executive Officer of CP. The Board has also determined that each member of the Audit Committee meets the additional
independence standards for audit committee members under Section 10A(m)(3) and Rule 10A-3(b)(1) of the Exchange Act, and Section 1.5 of NI 52-110 Audit
Committees.  ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES The table below shows the fees we paid to Deloitte in 2018 and 2017 for audit and non-audit services.  For the year ended December 31

2018


2017Audit fees for audit of our annual financial statements,
reviews of quarterly reports and services relating to statutory and regulatory filings or engagements (including attestation services and audit or interim review of financial statements of certain subsidiaries and certain pension and benefits plans,
and advice on accounting and/or disclosure matters)

$
3,800,200


$
3,834,100Audit-related fees for assurance and services related to
the audit but not included in the audit fees above, including securities filings

$
138,800


$
21,000
(1)Tax fees for services relating to tax compliance, tax
planning and tax advice and access fees for taxation database resources

$
121,000


$
153,100All other fees
for services provided relating to CPs corporate sustainability report and accounting training

$
54,000
(1)

$
34,600Total

$
4,114,100


$
4,021,800 NOTE:  (1)
In 2017, accounting training was presented under the heading, Audit-related fees. In 2018, accounting training is
presented under the heading, All other fees.  54




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##### Table of Contents

Pre-approval of audit services and fees The Audit Committee has a written policy for pre-approving audit and non-audit services
by the independent auditor and their fees, in accordance with the laws and requirements of stock exchanges and securities regulatory authorities. The policy sets
out the following governance procedures:  

the Audit Committee pre-approves the terms of the annual engagement of the
external auditor  

the Board pre-approves the fees for the annual engagement and budgeted amounts for
the audit and the Audit Committee pre-approves the fees for non-audit services at least annually  

the Vice-President, Financial Planning and Accounting submits reports at least quarterly to the Audit Committee listing
the services that were performed or planned to be performed by the external auditor  

any additional non-audit services to be provided by the external auditor that were
not included in the list of pre-approved services or exceed the budgeted amount by more than 10% must each be pre-approved by the Audit Committee or the committee chair.
The committee chair must report any additional pre-approvals at the next committee meeting  

the Audit Committee reviews the policy as necessary to make sure it continues to reflect our needs  

our chief internal auditor monitors compliance with the policy. The Audit Committee or committee chair must be satisfied that any services it pre-approves will not compromise the independence
of the external auditor. The committee pre-approved all services performed by the external auditor in 2018, in accordance with the policy.  55




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##### Table of Contents

PART IV  ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULE Part IV (Item 15) of the 2018 Form 10-K is hereby amended solely to add the following exhibits required to be filed in
connection with this Amendment No. 1.  (b)
Exhibits Exhibits are listed in the exhibit index below.  Exhibit

Description31.1*

CEO Rule 13a-14(a) Certifications relating to this Amendment No. 1 on Form 10-K/A31.2*

CFO Rule 13a-14(a) Certifications relating to this Amendment No. 1 on Form 10-K/A  *
Filed with this Amendment No. 1 on Form 10-K/A  ITEM 16.
FORM 10-K SUMMARY Not applicable.  56




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##### Table of Contents

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.  CANADIAN PACIFIC RAILWAY LIMITED(Registrant)By:

/s/ KEITH CREELKeith CreelPresident and Chief Executive Officer
 Dated: April 23, 2019  57




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##### Table of Contents

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Company and in the capacities indicated on April 23, 2019.  Signature

Title*
Keith Creel

President, Chief Executive Officer and Director (Principal
Executive Officer)/s/ NADEEM VELANI Nadeem
Velani

Executive Vice-President and Chief Financial Officer (Principal
Financial and Accounting Officer)*
Andrew F. Reardon

Chairman of the Board of Directors*
John R. Baird

Director*
Isabelle Courville

Director*
Gillian H. Denham

Director*
Rebecca MacDonald

Director*
Edward Monser

Director*
Matthew H. Paull

Director*
Jane L. Peverett

Director*
Gordon T. Trafton

Director*By:

/s/ NADEEM VELANINadeem VelaniAttorney-in-Fact   58