Computer Associates International Inc. is expected this week to announce a
succession plan for its chief executive post in which a top IBM executive
will assume the role now held by Kenneth Cron, sources said.
The transition between CEOs is expected to take place over the next several
months, sources said. The sources declined to identify the IBM executive.
The CEO succession plan would resolve a major point of uncertainty for the
Islandia software giant, whose past chairman and CEO, Sanjay Kumar, resigned
in April amid a $2.2 billion accounting scandal.
Kumar in September was indicted on 10 counts of securities fraud, conspiracy
and obstruction of justice. He has pleaded not guilty to the charges.
Cron, a CA board member since 2002, took the CEO role on an interim basis in
April. After initially indicating he wasn't a candidate for the permanent
role, Cron this summer said he would consider the post if the board
requested it. Though Cron is said to have had a majority of the board's
support as recently as October, sources said pressure to hire an outsider
recently prevailed. A CA spokeswoman last night declined to comment.
During Cron's term, the company successfully settled government probes,
replaced and reorganized upper management, acquired two companies and
improved its financial performance.
Cron is expected to remain in the interim position during a transitional
period that ends when his contract expires March 31, the sources said.
The CEO search was beset by government investigations that made recruiting
for the top spot a difficult sell and boardroom squabbles about whether an
insider or outsider was best suited to CA's situation.
A top executive of German software maker SAP AG was reported by Newsday in
October to be a top outside contender, but he subsequently dropped out of
the running, sources said.
Computer Associates is said to be considering postponing its giant annual
user conference until 2006, separate sources said. CA had scheduled the CA
World conference for April in Orlando, a date that as of yesterday was
listed on its Web site.
Last month the company laid off many of the internal staffers charged with
organizing the conference, which draws tens of thousands of customers,
partners and internal staffers.
CA, which has been on a cost-cutting binge, could save $30 million by
postponing the conference a year, the sources said.
The CA spokeswoman declined to comment on CA World plans, although she said
the company has acknowledged it was "evaluating our marketing programs."
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