[WSJ] Tech Center: Board of Computer Associates Will Add Two New Members
June 25, 2001
By ROBIN SIDEL
Staff Reporter of THE WALL STREET JOURNAL
Computer Associates International Inc., the software maker under attack by a group of Texas investors, plans to appoint a Hong Kong executive and a finance veteran to its board, said a person familiar with the situation. The move, expected Monday at a regularly scheduled board meeting, will expand the board to 10 members.
Meanwhile, the largest shareholder of Computer Associates reiterated support for management as the company fights an effort by Ranger Governance Ltd. to take control of its board. Ranger is led by Sam Wyly, who last year sold his company, Sterling Software, to Computer Associates and has a $55 million stake in the company as a result of that deal.
1Computer Associates Will Face Proxy Fight Led by Former Owner of Sterling Software (June 21)
"As I stated in my letter to you of June 7, 2001, I have complete confidence in the existing CA management team and intend to support them fully," Swiss billionaire Walter Haefner wrote in a letter Friday to Mr. Wyly. Mr. Haefner holds a 21% stake in Computer Associates.
A Ranger spokesman said, "Merely adding two new members will not change anything and won't result in real growth at CA. In order to achieve real change and deliver real value to shareholders, the entire board must go."
Mr. Wyly unleashed an attack on Computer Associates last week, nominating an eight-person board slate for election at the company's annual shareholders meeting on Aug. 29. Existing directors include three insiders; the company's move will increase the percentage of outside directors.
Mr. Wyly accused Computer Associates of a "pervasive culture of fear and intimidation" and attacked its lagging share price. The Islandia, N.Y., company, which vigorously defended its strategy, has been hit hard by the technology slowdown and a controversy over its accounting methods.
People close to Computer Associates said it has been considering a board expansion for several months and the move isn't related to Mr. Wyly's efforts.
The board intends to name as directors Linus Cheung, deputy chairman of Hong Kong's Pacific Century CyberWorks Ltd., and Lewis Ranieri, who last year sold his Bank United Corp. to Washington Mutual Inc., of Seattle. A Computer Associates spokesman declined to comment.
The entire board will be up for election at the August meeting. Mr. Wyly will be able to nominate two additional candidates for the expanded board, said the person familiar with the situation.
Write to Robin Sidel at robin.sidel@wsj.com2
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