Computer Associates Board Wins Proxy Fight

The management of Computer Associates International Inc. on Wednesday fended off a challenge by Texas billionaire Sam Wyly as shareholders reelected all 10 incumbent board members, assuring founder Charles Wang will continue as chairman.

Management’s win followed a bitter and costly two-month battle over the world’s No. 4 software maker, played out in court and in full-page advertisements in major newspapers. Wyly accused the Wang team of mismanagement.

Each of management’s board nominees received at least 75% of the vote at a special shareholder meeting, according to an estimate by Computer Associates’ proxy advisors, the company said. The vote most likely means the end of Wyly’s fight to reshape the board.

The announcement of the management victory was greeted by applause from a crowd of more than 1,500 at the meeting at a hotel here, where the company is based.

“We are pleased that our shareholders believe the existing [board] members are the best-qualified to continue driving CA’s strong momentum for growth and enhanced shareholder value,” Wang said in a statement.

Shares of Computer Associates fell 71 cents to close at $32 on the New York Stock Exchange. The shares’ 52-week trading range is $18.19 to $39.

Wyly had alleged that Computer Associates’ leadership had allowed the stock price to languish and had created a culture that mistreated customers and employees. Wyly, a software entrepreneur, created two software companies that were later acquired by Computer Associates.

Wyly and his group, Ranger Governance Ltd., were not able to overcome the fact that nearly 29% of the voting shares were held by Wang supporter Walter Haefner and other company insiders who backed the current board.

Wyly and Ranger launched the proxy fight in June to oust the current board, including Wang and Chief Executive Sanjay Kumar, and take control of the company. Wyly’s initial goal was to replace the entire board with a slate of his own and become chairman.

When the takeover campaign failed to pick up steam, Wyly changed his strategy and instead offered a slate of four board nominees.

The challenge was unusual because Wyly held just 100 Computer Associates shares and because of the some $20 million both sides are estimated to have spent on the fight.

The California Public Employees’ Retirement System, CalPERS, had said it would vote its 3.1 million shares, about a 0.5% stake, in favor of the Ranger slate. Official results of the vote will be announced next month.