FROM SHAREHOLDER ADVOCATE
Letter blasts CA's exec search
BY MARK HARRINGTON
STAFF WRITER
July 29, 2004
Recent reports indicating that Computer Associates' interim chief executive
Ken Cron was being considered for the permanent slot prompted a shareholder
advocate to write to CA's chairman saying the CEO search may have been
compromised.
In the letter to Lewis Ranieri from investment banker Gary Lutin, who
conducts an online CA shareholder forum, Lutin said Ranieri's favorable
comments about Cron in a Newsday story Monday could dissuade outsiders from
applying.
"Monday's news report of your support for CA's interim manager as a
potential permanent CEO may be interpreted by some observers, including
alternative candidates for the position, as an abandonment of your efforts
to recruit a qualified outside executive," Lutin wrote.
Lutin urged Ranieri to address shareholder concerns about executive
compensation in periods of improper accounting, and CA's financial reporting
process, which he said "top professionals have trouble understanding."
A CA spokeswoman said the company received the letter but had no comment.
In a Newsday story Monday, Ranieri, when asked if Cron were a candidate for
the slot, said, "Yes. Ken is doing a good job, and we will look at all
alternatives, including him and the job he's doing."
Greg Taxin, chief executive of Glass, Lewis & Co., a San Francisco
governance consulting firm, said there are "valid reasons" for a board
member to give public backing to an interim CEO, including solidifying his
interim authority. But he added, "It's fairly rare a board member comes out
in the middle of a search process and levies substantial praise on one
potential candidate," which he said could discourage qualified outside
candidates from putting their names in the ring.
Copyright © 2004,
Newsday, Inc.
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