Computer Associates to Appeal Ruling

Software company Computer Associates Inc. said it will appeal a ruling made Tuesday by Delaware Chancery Court Judge Myron Steele ordering its top three executives to return more than $550 million in stock to the company. Computer Associates said its decision to award its chief executive, chief operating officer and executive vice president 20.25 million shares was indeed legal under a plan approved by shareholders. Steele had ruled in favor of two shareholders who had filed suit charging that the award exceeded the amount approved by the company’s board in 1995, and that forced the company to take a charge of more than $1 billion against its earnings--an announcement that prompted a one-day 31% drop in its stock. Computer Associates said that size of the award should have been adjusted for three 3-for-2 stock splits that occurred after the agreement was approved but before the shares were awarded to the three executives. The size of the award was increased to take those splits into account, despite the fact that the plan didn’t specifically mention stock splits.