CA's Wang finds himself least popular in vote

NEW YORK: Shareholders who last month decided the fate of the leadership of

Computer Associates International Inc., may have voted to retain incumbent board

members, but they markedly registered their disapproval of founder and chairman

Charles Wang.

According to the final and official tally of votes casts during the company's

shareholder meeting Aug 29, Wang received the fewest votes of all 10 members of

the board. He also earned more than three times the amount of votes withheld -

votes against him - than any other candidate for the board.

"I can't say I'm surprised," said Patrick McGurn, vice president of

stockholder advisory firm Institutional Shareholder Services Inc. "Some

people probably supported the management slate, but didn't want to send a vote

of confidence to Charles Wang."

The vote ended a proxy fight initiated in the spring by Texas billionaire Sam

Wyly, who started two software companies later sold to Computer Associates, the

world's No. 4 software company. Wyly originally sought to replace the incumbent

board with a slate of his own, oust chief executive Sanjay Kumar and Wang, and

become chairman of the Islandia, New York-based software company.

Wyly accused Wang of bilking shareholders out of $1.1 million when the board

voted and then granted the company's top three managers, Wang, Kumar and

Executive Vice President Russell Artzt the performance award. Shortly after it

was granted, management warned revenues would sag and the company's stock price

tumbled.

Wyly also accused Wang of creating a culture that mistreated its customers

and employees alike. Responding to shareholder reluctance to replace the entire

board and management team, Wyly scaled back his challenge and offered a minority

slate of four members. He was not one of them.

Wang gets negative votes



Wang received about 331.5 million favorable votes, compared with the 348 million
the other nine garnered. The most drastic difference however, was the number of

withheld votes. Wang accounted for 22.5 million of the negative votes compared

with fewer than 7 million for each of the others.

Although Walter Haefner, the company's largest shareholder with 21.4 per cent

of the firm's shares and Fidelity Management & Research Co., with 10.8 per

cent of the company's shares, didn't deviate from the slate, McGurn said, other

institutional shareholders showed their displeasure with Wang.

Former U.S. senator Alfonse D'Amato came in 9th out of the 10 members with

347.4 million votes and received the second highest negative votes at 6.6

million.

"It's a fairly common phenomenon among institutional investors,"

McGurn said. "It's a vote of non-confidence in that particular director.

They were willing to turn him out rather than have their vote be seen as an

endorsement of the compensation package and Wang's iron-fist ruling for all

these years."

Following the annual meeting, Wang and Kumar pledged to add two new

independent board members, improve communication with stock holders, hire an

outside consultants to improve employee relations and corporate governance, and

to phase out its pro-forma quarterly financial reporting.

Back then Wyly said those were part of the concessions Wang made to several

large institutions. Additionally Wyly said two current board members would step

down. Wang and Kumar vehemently denied the moves were part of a deal and said

they knew of no board member who would be forced to resign.

(C) Reuters Limited 2001.