UPDATE 1-CP Rail CFO McQuade to retire, latest exec to leave

* Will be replaced by CP finance VP Brian Grassby

* CP chief operations head quit 10 days ago

* CP faced proxy battle earlier this year

(Adds details on Grassby, background)

Oct 11 (Reuters) - Canadian Pacific Railway said onThursday that its chief financial officer, Kathryn McQuade, willretire on Nov. 1, the fourth senior executive to leave Canada'ssecond-largest railroad after a bruising proxy battle earlierthis year.

CP said Brian Grassby, the company's senior vice-presidentof finance, would replace her as CFO from that date.

McQuade will remain as a senior advisor to Grassby until theend of her contract in May 2013.

CP could not be reached immediately for comment.

The announcement of McQuade's retirement came 10 days afterCP said its chief operations officer Mike Franczak had resigned.

Their exits follow the resignations in May of CP ChiefExecutive Fred Green and Chairman John Cleghorn who left aftercompany management lost a proxy battle to activist shareholderWilliam Ackman and his company, Pershing Square CapitalManagement.

Ackman's choice for CEO, Hunter Harrison, the former CEO ofCP rival Canadian National Railway Co , has since beenappointed to the top post at CP.

(Reporting By Nicole Mordant in Vancouver; editing by CarolBishopric)


Messaging: nicole.mordant.thomsonreuters.com@reuters.net))