CA reaffirms shareholder value

If there was one phrase that was heard repeatedly at CA World, Computer Associates’ annual user conference, it was “shareholder value.”

The conference, held earlier this month in Orlando, Fla., was somewhat overshadowed by recent events reported in the press about CA and its very public battle with one of its shareholders, Texas billionaire Sam Wyly.

“Lately there are those who want to rewrite our history and impede our progress,” said Sanjay Kumar, CA’s president and CEO near the end of his keynote address. “But I can assure you that the 25 years of history of innovation that you have allowed us to have, given our partnership, will allow us to grow together for many years to come.”

Although only in possession of 100 shares of CA stock himself, Wyly is leading a proxy fight to unseat CA chairman Charles Wang and the rest of the board in an effort to become chairman himself. He wants to split the company into four independent units that serve the fields of storage, security, systems and knowledge management. Wyly, the former chairman of Sterling Software International Inc., sold that company to CA in March 2000 for US$4 billion in stock. He has launched a public campaign in an effort to sell CA shareholders on his proposition.

“We don’t understand Mr. Wyly’s motivation – other than money. His timing is extremely opportunistic; it’s self-serving,” Kumar said in an earlier press conference at CA World. “Take a look around – there aren’t many software companies that have been around for 25 years that have been successful. The rest will take care of itself.”

When asked by one journalist what would happen if Wyly succeeded, Kumar shot back, “If Mr. Wyly is successful we won’t need a plan – it’s going to be his plan.” This was met with laughter by the press in attendance.

Rob Hailstone, an analyst with IDC in London, said he felt CA spent too much time on the subject, and that Kumar should have just mentioned it and then moved on.

“It seemed to be very much reactive. So: ‘The customers have asked us to do this, this and this. Computer Associates has responded by doing this, this and this.’ And it just struck me as being a very defensive thing,” Hailstone said.

“It was put across very professionally, but the message was singularly lacking in any sort of leadership,” he added.

“Most people I have talked to seem to think [CA is] making people more aware of it (the Wyly situation) by giving such a detailed response. And I don’t think many people really seriously think there’s very much chance of the Wyly move working, but I think that by emphasizing their response so much, that they’ve possibly made people think twice about it.”

Another analyst in attendance disagreed with Hailstone’s assessment, however.

“Everyone’s an expert when they aren’t the ones on the spot,” said Valerie O’Connell, an analyst with Boston-based Aberdeen Group.

“If Sanjay had ignored the Wyly issue he would have been accused of having his head in the sand. I personally think he hit precisely the correct note – gracious, firm, direct, and confident. Just the way leaders are supposed to conduct themselves. Wyly is getting his 15 minutes of fame; I see no reason for CA to help him make it 20.”

O’Connell said that, because she doesn’t know Wyly personally, she wouldn’t comment on his motives, but added, “Since I don’t see any way for it to succeed, media attention is the only guaranteed outcome of this endeavour.”