Computer Associates (CA) yesterday lost the backing of a leading US independent proxy advisory firm which has now recommended its clients to back maverick rival Sam Wyly.
Institutional Shareholder Services (ISS) had supported the current CA board but changed its mind after Wyly removed himself as a board candidate and his investment group, Ranger Governance, said it wanted four seats on the 10-member board.
ISS also recommended to its clients that CA shareholders vote the four Ranger Governance director nominees to the CA board of directors at the annual meeting of CA shareholders on 29 August.
"The revised Ranger slate, by contrast, offers instant medicine for what ails CA. With the addition of four Ranger nominees, who cannot by even the most sceptical observer be regarded as pliant to management, the company benefits by the addition of credibility, of trust, and of confidence that executive compensation will be subjected to meaningful scrutiny, and that customer and employee relations will be given foremost priority," said the ISS report.
It further stated that CA is much in need of a clean break from its past and in particular from the influence of chairman and founder Charles Wang, whose continued presence on the board depresses investor confidence in the progress being made.
CA issued a statement saying that it is disappointed in the decision by ISS to change its recommendation in favour of Wyly.
"Were Wyly's slate to prevail, it would create a divided board and hurt the company and the shareholders," said Wang. "Under Wyly's latest scheme, the board would include four of Wyly's own hand picked appointees who would be likely to push a plan designed by Wyly that, in our view, has been discredited."
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