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Bill Snyder The management of Computer Associates (CA:NYSE) on Wednesday defeated three efforts by shareholders and corporate governance advocates to punish the company for an accounting scandal that led to the restatement of $2 billion in revenue, the indictment of several former executives and the departure of CEO Sanjay Kumar.
But one of the motions -- a move to force Kumar and other executives to return at least part of the bonuses they earned in that period -- garnered 24% of the vote, and provoked an angry exchange between shareholders and some board members at the company's annual shareholders meeting.
"If you didn't earn it, you shouldn't keep it," said a spokesman for the Amalgamated Bank Long View Collective Investment Fund, which submitted the proposal.
According to the proposal, Kumar received a bonus of 80,000 shares and $3.2 million related to the company's "supposedly superior performance" in 2000.
The company's board opposed the measure, saying it would punish employees who were not guilty and would damage morale, but board member Gary J. Fernandes said, "We take these matters seriously. We agree in principal with the spirit of this proposal, it would be a mistake for employees to keep ill-gotten gains at the expense of our shareholders."
Several shareholders loudly demanded to know when the company would decide what to do about the bonuses, and were testily told to "be patient."
Proxy advisory firm Glass-Lewis recommended that shareholders withhold votes from two of the company's directors: Russell Artzt, who is executive vice president of CA's eTrust unit, and former New York Senator Alfonse D'Amato. They are the only remaining directors from the period when CA illegally backdated revenue to meet quarterly financial targets.
But only 5% of the votes favored that motion, and just 4% agreed with a proposal to drop KPMG as the company's independent auditor. KPMG approved the inaccurate financial reports. |
