Trapped for four hours on a flight packed with irritable travelers waiting for takeoff in Washington, D.C., Bob Davis couldn't help but wonder if the delay was an omen. He was on his way to a job interview. Even before the flight he'd had qualms, but as he sat on the runway as the hours ticked by, he really started to worry. Forty-five years old at the time, Davis had nimbly scaled the corporate ladder to win the job of chief accounting officer at Dell Inc. Then came a call from a headhunter asking him if he would consider going to Computer Associates International Inc., the Islandia, New York–based software giant rocked by an accounting scandal. Part of the allure was a chance to work with Jeff Clarke, CFO of Computer Associates, whom he had met years earlier when Clarke was CFO of Compaq Computer Corp. But taking the post would mean joining the cleanup crew at a very messy corporate crime scene.

As he fretted about the risks of the new job, things got worse. Bad weather forced the aircraft to divert to Syracuse, New York, for several hours before finally landing at New York's LaGuardia Airport. At 3 A.M., Davis arrived at his hotel to find no room at the inn. Sent across town to a fleabag motel, he had time for only a half-hour nap before showering and shaving for a full day of interviews. But despite the rocky start, Davis was intrigued by the opportunities at CA, as the company is now officially known. Three months later, lured by a pay package that could be worth $2.3 million or more over the next two years, he joined the company.

As chief financial officer, Davis is a key member of the team working to resurrect the $3.5 billion company. Once one of the stars of the software industry, CA crashed in 2002 when federal regulators charged certain top executives with falsifying financial records in a $3.3 billion fraud that began in 1998. Now operating under an innovative legal deal called a deferred-prosecution agreement, or DPA, CA's executives are racing to complete reforms while bolstering the company's core business in an increasingly competitive software market.

Davis has joined a group of heavy hitters. CA's CEO is John A. Swainson, 51, a 26-year veteran of IBM Corp., where he had held key product-development and sales jobs. CA's chief operating officer is Clarke, 44, who became executive vice president of global operations for Hewlett-Packard Co. after it acquired Compaq in 2002. Of CA's top 35 executives, half were recruited within the past two years. "It's definitely a new CA," says Jean-Pierre Garbani, a vice president at Forrester Research Inc., a technology- and market-research firm in Cambridge, Massachusetts. "But the company's success depends on how well they execute, and it's too soon to know that yet."

The Watchful Overseer
The deadline looms. By September 30, CA will have had to fulfill a host of obligations or else face charges of fraud and obstruction of justice under terms of the DPA. Some $80 million worth of financial-reporting software has to be installed and functioning adequately. CA's finance department must be reorganized and strengthened. Although CA has met many of the terms of the DPA, such as hiring a chief compliance officer and controllers for each of its five business units, much work remains to be done.

Meanwhile, CA is laboring under the watchful eye of an overseer. The DPA specifies that CA's rehabilitation is subject to the scrutiny of a court-appointed independent examiner, Lee S. Richards. A partner in the law firm of Richards Spears Kibbe & Orbe LLP in New York, Richards, who declined to be interviewed for this article, maintains an office at CA's headquarters. His reports to the board, the court, and federal agencies are confidential. CA would not disclose what, if any, recommendations he has made to the new executive team.

CA also must mend its reputation with customers, shareholders, and Wall Street. One of its largest institutional investors is Private Capital Management LP, a unit of Legg Mason, which holds 11.6 percent of CA and has been accumulating shares since 2000. The money manager made headlines recently by forcing Knight Ridder, the newspaper chain, to put itself up for sale. Through a spokesman, PCM declined to comment on CA. CA still faces the wrath of other angry shareholders who have filed lawsuits against the company, among them Texas billionaire Sam Wyly.

So the job is a risky bet for Davis. After all, the finance department was the scene of the crime — and the cover-up — at CA. Much of the work of rehabilitation rests squarely on his shoulders. If successful, the financial payoff could be big. CA lured Davis with a signing bonus of $275,000. His base annual salary is $525,000. If he meets certain targets, he will earn a bonus in his first year of $525,000. CA also has promised him $2.2 million in long-term incentives such as stock options and restricted stock. But Davis says the move wasn't just about the money. "It was frankly about the opportunity," he says. "There was limited opportunity to move up at Dell."

Still, colleagues were surprised when he took the job. James Schneider, CFO of Dell and his former boss, admits he was baffled when Davis announced he was leaving Dell for CA. Davis is "a good, solid guy," says Schneider, "but I wouldn't have thought of him as a risk-taker." (Dell had been very generous with Davis. He made approximately $3.1 million by cashing in his stock options in 2003 and 2004.)

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