JG....some mild grumblings and negativity in this article..... which of course is positive.... and the beat goes on...I love it. Woops...i mean hate it. :o{/
Wednesday August 25 5:35 PM ET
CA Shareholders Reject Compensation Curb
By Nicole Volpe
ISLANDIA, N.Y. (Reuters) - Computer Associates International Inc. (NYSE:CA - news) shareholders Wednesday rejected a shareholder proposal to limit the stock compensation of some of the software company's top executives, who received stock valued at more than $1 billion last year.
Nearly 96 percent of shareholders voted against or abstained on the proposal. The motion gave some support to management after a year of a steep share price slide and its results hurt by weakness in Asia and year 2000 computer concerns.
Computer Associates, the No. 3 U.S. software supplier, became a focal point in the debate over excessive executive compensation last year. A shareholder-approved plan linked to the company's share price performance rewarded its three top executives stock then valued at more than $1.1 billion.
''A billion dollars is out of control,'' said Roger Rath, the shareholder who submitted the proposal suggesting that compensation be, ''expressed as a multiple of pay of the lowest- paid worker at CA.''
''To take that much from the assets of the company affects the health of the company,'' said Rath, who owns 200 shares, in a telephone interview.
Chief Executive Charles Wang, listed ninth on the Forbes list of the richest people in America, received stock then valued at $645 million. He is among the highest paid executives in the high-tech industry.
About two months after the bonus, the company warned that its corporate clients would be curbing spending due to year 2000 fixes and troubles in Asia. Soon after the profit warning, the company's share price lost 30 percent of its value and CA was hit with a shareholder lawsuit that is still pending in federal court.
Outside the shareholder meeting here at which the vote was taken, shareholders who voted against the compensation measure said the stock had largely recovered from that decline.
''I'm hoping they will be able to maintain their line,'' said Billy Star-Librizzi, who voted against the measure. ''It seems the company is able to attract some talent (by using stock).''
The vote may alleviate some of the pressure Computer Associates has felt from disgruntled shareholders, said Brown Brothers Harriman analyst Dawn Simon.
''This executive-compensation issue is a last remaining sore spot,'' Simon said.
Issues facing Computer Associates now include a huge debt after the acquisition of rival Platinum Technology Inc.
Forbes magazine last year quoted Wang, who in 1976 was trading computer services for free rent in Manhattan while he started the company, as saying: ''When we ran out of money we ran out and got a new credit card.''
In June 1999, the company replaced its two revolving credit agreements totaling $2.6 billion with three new agreements totaling $4.5 billion in order to pay for costs related to the tender offer for Platinum's outstanding shares.
Last month, Standard & Poor's lowered its corporate credit and senior unsecured debt ratings on CA to triple-'B'-plus from single -A'-minus, the downgrade reflecting the company's weakened financial profile and management's aggressive financial policy.
''It's unusual for a technology company to be that highly leveraged,'' said Simon.
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