Wang, Kumar Defend Wyly Settlement, Plane Use

Shareholders hammered Chairman Charles Wang and President and CEO Sanjay Kumar about their use of corporate airplanes for personal reasons and the decision to pay $10 million to at least temporarily avoid further proxy battles with Sam Wyly, founder of Ranger Governance.

Last month, CA, Islandia, agreed to pay $10 million in exchange for Wyly's agreement to a five-year standstill from engaging in proxy contests for CA board seats and to extend Wyly's noncompete agreement with CA for another five years.

One shareholder said the money could have been used for a dividend because "Wyly and his henchmen" could be back in five years looking for another payoff.

"That is the sad reality that we have to do business with today," Wang said. "It is cheaper and it takes the distraction away so that we can focus on the company," Wang said. "Otherwise, it would cost way over $10 million and would be a bad use of resources. It's a distraction that is easier to get out of the way. He may or may not come back."

Wang grew testy after repeated questions about the use of airplanes and a helicopter for personal use. Newsday reported Wednesday that Wang and Kumar used them to travel to Hawaii and the Caribbean.

The executives said they reimburse CA for the costs associated with personal travel from debit accounts they created specifically for that situation. Several shareholders said the company should disclose that information, but Wang argued it would be prohibitive to publicly account for every instance.

"I know what [Sanjay does. I know when he's on vacation. You can only get into people's shorts so much before they can't do anything. We've got to keep going and focus on our business. We've got to get the [Securities and Exchange Commission inquiries behind us. We didn't build up this company for 25 years to screw it up. Next question," Wang said.

Executives mostly use the planes for corporate travel, Kumar said. He cited an example in which he may board the plane at 4 a.m., have breakfast in Dallas, lunch in California and dinner in Chicago before returning to Long Island.

During the meeting, CA voted all 11 board members to one-year terms. The board includes five recently named non-employee directors, but does not include any women. One female shareholder asked the board to consider more female nominees in the future.

"The nominating committee has done an incredible job to get new directors," Kumar responded. "It's not easy to get new directors for a large public company today, especially with the [SEC inquiry on our hands. We're fortunate that we have very qualified people. We had a number of candidates that were women. One could not serve. We are acutely aware of it."

Wang and Kumar vigorously defended CA's new corporate governance policy and said the SEC inquiry into CA's accounting would show no misdoings.

"I don't have to tell you this has been a challenging year for CA. I am disappointed in the performance of the stock. CA has suffered because of an unwarranted cloud over the company," Wang said. "We are cooperating fully with the government in the hope they will get everything they need. We know our accounting practices have been proper, but we must let the investigation run its course. We have the right management, we have the right business model and we have the right corporate governance to prosper."

Kumar noted that CA ranks among the top 5 percent of public companies for corporate governance as rated by ISS and that term limits for board members and an annual evaluation of the CEO position will strengthen the company.

In technology, CA is investing in wireless, Web services, Linux, security and centralized storage management, Kumar said.