CA Pays Wyly $10 Million to Drop Proxy Battle
Wyly agrees to desist from all proxy battles for five years; CA agrees to add one more independent board member.Computer Associates International Inc. bought peace from dissident shareholder Sam Wyly for $10 million. In exchange, Wyly agreed to desist from all proxy battles for five years and to extend an existing non-compete agreement to five years. CA also agreed to add one more independent board member. Wyly, through his firm, Ranger Governance Ltd. of Dallas, had been seeking to displace five CA board members, including CA founder and Chairman Charles Wang, President and CEO Sanjay Kumar, and Executive Vice President Russell Artzt. The proxy fight followed by a year Wyly and Rangers failed attempt to replace the entire board of directors. This years fight cited many of the same issues as last years, key among them the poor performance of CAs stock. Wyly, whose firm was acquired by CA, owns millions of CA options. His options are unaffected by the deal. CA announced that its Corporate Governance Committee will nominate an additional independent director and the entire board will vote on the nomination, most likely before the end of the calendar year.
Despite the payoff, both parties sought to clothe the deal in language of corporate governance reform. In a prepared statement, Kumar said, "We are pleased to put this matter behind us. In conversations with Ranger over the last few days, it has become clear that Ranger and we are largely in agreement on corporate governance issues. And we are pleased that many of their suggestions have already been incorporated in our Corporate Governance Principles announced in May and contained in our recently filed preliminary proxy. In particular, we agree with Rangers thesis that companies with good corporate governance will in the long run be awarded a premium by shareholders."