Computer Associates International Inc has announced that its founder Charles Wang has retired as chairman of its board of directors, effective immediately, and that the board has elected president and CEO, Sanjay Kumar, to replace him.
No reasons were given for Wang’s departure from the Islandia, New York-based company’s board, which has named him to the honorary position of chairman emeritus. In a statement, Wang described the abdication of power to Kumar as a transition of leadership and maintained his confidence in CA’s position.
It is very gratifying to have completed this important step successfully by grooming and recommending my successor, he said. I am confident that Computer Associates, with a new generation of strong leadership, is well positioned for its next great period of growth and success.
Kumar’s succession to the helm of CA has been a long-term development. He joined CA via the 1987 acquisition of database company UCCEL, and rapidly became Wang’s right-hand man. In 1994 he was promoted to chief operating officer and president, and became the nominated successor to former CEO Wang. That position was attained in August 2000 in an accelerated promotion. While the timing of Wang’s retirement was unexpected, the confirmation of Kumar as his replacement could not have been a surer bet.
Born in Shanghai, China in 1944, Wang moved to the United States with his family in 1952 and founded CA in 1976 with an initial staff of four people and a single product: CA-SORT. The company now has over 1,200 products and a valuation of over $9bn following a 1981 IPO and countless acquisitions, including two of the biggest in IT history: the $4bn March 2000 acquisition of Sterling Software Inc and the $3.25bn June 1999 acquisition of Platinum Technology Inc.
Those and countless other smaller acquisitions enabled CA to become one of the biggest independent software companies in the world with interests in systems and storage management, security, application development, databases and business intelligence. They also, somewhat inevitably led to the company being criticized for using its financial muscle to grab market share without paying the necessary attention to product integration and innovation.
In fact Wang leaves CA after what must amount to one of the worst years in its history. The company is the focus of investigations by the Securities and Exchange Commission and US Attorney’s Office into its financial accounting and only narrowly avoided a second consecutive proxy battle with the controversial $10m pay-off of dissident shareholder Sam Wyly, the former CEO of Sterling Software.
The company has also had to try to improve its image, with the appointment of additional external directors and a lead independent director, following the adoption of new accounting procedures and almost continual controversy over its cash flow and revenue generation.
All of this must have spoiled Wang’s final year in charge somewhat, but should not detract from the rapid and dramatic growth the company enjoyed under his management during the 1980s and 90s.