Computer Associates Claims New Accounting Practices

Computer Associates' shareholders re-elected the Islandia, N.Y., company's slate of 10 directors, including 8 outsiders, at their annual meeting Wednesday.

Shareholders peppered the board with questions about everything from the company's decision this week to settle shareholder lawsuits to the directors' compensation.

"We do understand the suspicion of American corporations" in the wake of scandals at Enron Corp. and WorldCom Inc., said Jay Lorsch, a business professor at Harvard University and one of several outsiders who joined the software company's board last year.

But the company, whose executive compensation and accounting has been criticized in the past, has taken steps to ensure "we do not get ourselves into the cycle of greed that other companies have gotten into," Lorsch added. "We provide good oversight on your behalf."

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Lorsch also said the board was looking to add "at least one, perhaps more, directors" in the coming year and hoped to add a woman to the all-male board.

The meeting was devoid of the drama of the previous two years, when billionaire investor Sam Wyly tried to elect a dissident slate of directors.

Neither Wyly nor his principal rival, Charles Wang, the company's former chairman and chief executive, were in attendance. The company paid Wyly $10 million to end a proxy contest last year and Wang retired from the company in late 2002.

Computer Associates said a preliminary tally shows its board nominees, who ran unopposed, received more than 95 percent of the votes cast.

In October 2000, the company roiled investors when it changed the way it recorded revenue. Rather than book large upfront fees, the company decided to record revenue evenly over the life of a contract.

The change resulted in lower reported revenue and losses, until recently, and prompted a federal investigation.

New York Stock Exchange-listed shares of Computer Associates, which have more than doubled in the last 12 months, closed Wednesday up 17 cents to $24.99.