CA board fends off shareholder protests
The Islandia, New York-based systems management vendor's slate of 11 nominees including four new directors was approved by its shareholders, despite concerns over the $10m CA paid Ranger in July to drop its second consecutive proxy challenge. That payment has been criticized by some corporate governance experts, including Institutional Shareholder Services, which had advised its clients to withhold votes for the company's seven incumbent board members as a protest.
The $10m payment was for a five-year agreement with Wyly not to launch another proxy contest, and also extended a non-compete agreement between Wyly and CA, which followed CA's March 2000 acquisition of Sterling Software Inc, a company Wyly founded. Although it was a costly way for CA to put the proxy fight behind it, the payment was also less than the $12m CA spent on its 2001 proxy battle with Ranger.
While the $10m payment will be of concern to some shareholders, many more will be concerned about the ongoing investigation into CA's accounting practices by the Securities and Exchange Commission and US Attorney's Office. Those investigations are ongoing, and while CA continues to maintain its innocence, they are still casting a black cloud over the company's image.
To improve its image, the company has increased the number of outside directors serving on its board. Eight of the 11 board members are independent of the company's management team, while board member Lewis Ranieri has been elected its first lead independent director to counterbalance to the power held by chairman Charles Wang and CEO Sanjay Kumar.
CA is also planning to appoint a twelfth board member later this year, bring the number of outside directors to nine. Although the company has identified potential candidates for the role, the appointment is not expected until next month.
CA has not released details of the final vote tally from the shareholder meeting, although it said that based on estimates by its proxy solicitation advisers, all of the company's 11 nominees received at least 84% of the shares voted.