CA Holders
Vote
Not to Seek Cash
Of Ex-Executives
By CHARLES FORELLE
Staff Reporter of THE WALL STREET JOURNAL
August 26, 2004
HAUPPAUGE, N.Y. -- Computer Associates International
Inc.'s shareholders rejected a proposal to seek the return of millions
of dollars paid to executives driven out of the company in the wake of
an accounting scandal.
According to preliminary figures, 76% of shareholders
voted at the annual meeting here against the proposal, made by
Amalgamated Bank Long View Collective Investment Fund. The company's
board had opposed the measure.
Cornish Hitchcock, representing Amalgamated, said the
proposal was based on the "simple principle" that "if you didn't earn
it, you shouldn't keep it." Mr. Hitchcock said the board should quickly
address the issue, adding "avoidance is not a good strategy." He was
greeted with sustained applause.
Chairman Lewis Ranieri told shareholders that the board
was considering what to do about the payments but hadn't yet made a
decision. He assured shareholders that CA would seek the money back if
the board determined it was "generated by evil deeds."
Interim Chief Executive Kenneth Cron later said
decisions would be deferred until after the federal government, which is
probing CA's accounting, has wrapped up its investigation.
Board members were faced with complaints from several
shareholders, many upset by the stock's decline and concerned by what
they see as outsize payments to executives.
"This board is here for your protection," director Jay
Lorsch told one shareholder who asked about the attendance records of
directors at board meetings. Shareholders in attendance groaned after
Mr. Lorsch said directors had spent Super Bowl Sunday working.
More than a dozen employees have been forced out in the
accounting probe that has rocked CA. Prosecutors have secured guilty
pleas from four former executives.
Mr. Ranieri said the board was continuing to search for
a chief executive to succeed Sanjay Kumar. Mr. Kumar hasn't been accused
of wrongdoing.
Write to Charles Forelle at
charles.forelle@wsj.com1
