Wang beats Wyly in CA proxy challenge
Charles Wang has retained control of the board of Computer Associates, defeating the attempted proxy shareholder takeover by Texan billionaire Sam Wyly
Charles Wang and his Computer Associates board have survived the takeover battle with Sam Wyly. Shareholders voted almost three to one in favour of the existing CA board in the proxy takeover battle that has been raging for the past few months.
Wyly’s Ranger Governance investment firm had accused the CA board of fostering poor financial performance and poor customer relations, and had attempted to convince shareholders to throw out Wang and his directors in a vote that was held yesterday. The proxy takeover, which was launched in June, led to a war of words in the press between CA and the Texan entrepreneur, who intended to take Wang’s position as chairman of CA.
Wyly, who sold his Sterling Software company to CA last year, had originally attempted to remove the entire CA board, including CEO and President Sanjay Kumar. He then changed tactics to try and oust just four directors, including Wang, but not Kumar; a move that was met with some enthusiasm for institutional investors. Initial vote counting shows at least 75% of votes cast going to CA board members, although the vote will not be certified for another ten days.
Wyly was claiming a moral victory yesterday: “We have demonstrated that shareholders can work together to affect positive change," he told a press conference following the release of preliminary results.
He believes that the battle has shown up areas of that need improvement from CA, and wider corporate governance issues.
CA Chairman Charles Wang and President and CEO Sanjay Kumar also discussed some of CA's future plans, including the addition of two independent board members, the formation of a committee to oversee employee relations issues and the potential termination of the company's controversial pro forma, pro rata method of reporting financial results.
The proxy battle did prompt some introspection for CA, Wang said. “These circumstances have given us all a chance to step back and see what we have here at CA and our potential for the future,” Wang said.
In an interview with CRN US, Kumar said the one thing CA has learned from the proxy battle is that it needs to communicate more effectively with shareholders. The software vendor plans to broaden its investor relations department, hold more regionalized meetings for shareholders and introduce more electronic communication with shareholders, Kumar said.