Computer Associates International Inc.’s shareholders have rejected a shareholder proposal that would force the firm to recover massive bonuses paid to key executives during the period when its accounting practices were questionable.
CA said yesterday that 76% of its shares were voted against the proposal, which was put forth by Amalgamated Banks’ LongView investment fund. But the company said the issue of executive compensation is not closed.
During the firm’s annual shareholder meeting this week, CA’s owners also chose to reelect the full slate of CA directors who were standing for reelection, even the two who were present during CA’s period of dodgy accounting.
Company chairman Lewis Ranieri said in a statement: We are working with the government to resolve all outstanding issues and are reviewing compensation paid to certain officers in prior years.
Amalgamated said its proposal asked the board to review any executive bonuses that were awarded for meeting performance targets and recoup for the company any bonuses that were not, in fact, earned. Institutional Shareholder Services supported the motion.
CA has already confessed to an accounting scam among senior executives in fiscal 2000, in which quarterly accounts would be help open beyond the end of the period, until the company had made its aggressive sales targets.
Sanjay Kumar, then the president and chief operating officer, received a bonus of 80,000 shares and $3.2 million, based on the Company’s supposedly superior performance in 2000, Amalgamated’s motion said.
In 1998, a period that is not yet included in the scandal, Kumar, former CEO Charles Wang and executive VP Russell Artzt received a total of $1.1 billion in CA stock, as part of a three-year-old bonus scheme that was tied to the company’s share price.
While I cannot say exactly when this chapter in CA’s history will be over, I can assure you that the members of CA’s Board of Directors and Management Team are working with the government and doing everything we can to reach closure, Ranieri said.
In May, the company offered the US Securities and Exchange Commission $10 million to settle its ongoing investigation into the firm’s accounts.