Bankruptcy

Davis Leaves CA

The CFO is the latest of several executives to leave, casting doubt on the company's effort to avoid government prosecution.
Stephen TaubMay 15, 2006

In a surprise announcement, CA said executive vice president and chief financial officer Robert Davis will leave the company “under mutual agreement.”

No further explanation was provided.

Davis was part of a team of executives brought in to help the company recover from a major accounting scandal, and his departure appears to be another blow to that effort. The company is operating under a deferred prosecution agreement, and has about five months left to fulfill a host of obligations, or face charges of fraud and obstruction of justice.

Davis is the third top executive in the past month to leave the computer software giant. In April, Chief Operating Officer Jeff Clarke left to run the travel unit at Cendant Corp. while last week chief technology officer Mark Barrenechea left to become a partner at buyout firm Garnett & Helfrich Capital.

CA said controller Robert Cirabisi has assumed the responsibilities of CFO while the company conducts an external search for Davis’ successor. The company said Davis, who joined CA in February, 2005 from Dell, will remain for “a short period of time” to help with the transition.

Just last week, Davis appeared at a Securities and Exchange Commission roundtable, representing CA and the U.S. Chamber of Commerce as companies told regulators about their second-year experiences with the internal control reporting and auditing provisions of the Sarbanes-Oxley Act. Commenting on those provisions, Davis said bluntly, “In a nutshell, the costs are too high and the benefits are too low.”

It is not clear what might have sparked Davis’s departure. James Schneider, CFO of Dell, and Davis’s former boss, was baffled when Davis left Dell for CA, telling CFO magazine at the time that “I wouldn’t have thought of him as a risk-taker.”

In a statement, CA President and CEO John Swainson provided little in the way of explanation, noting simply, “When we began the task of transforming CA, we knew that we would encounter many challenges and understood that in an undertaking of this scale and scope, changes were to be expected.”

“Eighteen months into the process,” he added, “it is clear that although we still have a way to go, we have made progress. We are confident in our strategy and in the priorities we have identified to bring that strategy to life. The mission for the year ahead is to improve our execution. The management team and I are committed to doing just that.”

Last month, former CEO Sanjay Kumar pleaded guilty to criminal charges that he led a $2.2 billion accounting fraud at the company, known at the time as Computer Associates. (Former CFO Ira Zar and two other finance executives pled guilty to obstruction of justice charges in 2004.)

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