Risk Management

CA Seeks Return of Executive Pay

The software giant reportedly had been trying to thwart efforts by shareholder lawyers to get former company officials to pay back money they gaine...
Stephen TaubJune 28, 2006

In an about-face, CA is trying to get at least seven former executives to return ill-gotten gains following the guilty pleas of two former top executives last April, according to Newsday.

The company, formerly known as Computer Associates, had been trying to thwart efforts by shareholder attorneys to get former company officials to pay back money they gained via accounting misdeeds at the software giant. CA had claimed that only the government should be conducting this kind of exercise.

Now, CA is hiring its own team of experts and investigators in a bid to retrieve some of the compensation paid to the executives, which it wouldn’t name, according to the New York newspaper. The company, which is trying to forestall depositions of current board members by shareholder lawyers, says a special litigation committee has taken “substantial steps” to investigate the claims on its own, the paper noted.

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The committee has its own legal counsel, “and we are not privy to information regarding this letter,” a company representative told Newsday in an E-mail.

Shareholder suits have named former chief executive Sanjay Kumar and former executive vice president Stephen Richards, who pleaded guilty on April 24 to securities fraud and other charges in the wake of the accounting scandal at the company. Suits have also been filed against four former finance executives and a general counsel who earlier entered guilty pleas, co-founders Charles Wang and Russell Artzt, and a number of former CA executives and directors.

Separately, CA said it would add to its proxy a shareholder proposal that seeks to change the company’s bylaws to limit the company’s poison-pill provision, according to the Associated Press. The company had hoped a Delaware court would rule that it was able to reject the proposal. Instead, the court refused to rule on the matter.

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