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Note:  The company responded to the article below in a press release issued at 1:40pm ET on October 1, 2004.


Boardroom battle over CA's next CEO


October 1, 2004

A boardroom tug-of-war is developing over the appointment of the permanent chief executive officer for Computer Associates International Inc., with the interim CEO garnering key support from top investors over an outsider, several sources said Thursday.

The majority of CA's nine-member board and some large shareholders favor Kenneth Cron, the interim chief executive, as the company's permanent CEO, but two holdout directors are pushing for an outsider, and their preferred candidate is from German software firm SAP AG, the sources said.

That candidate, Leo Apotheker, is SAP's global field operations president and an SAP executive board member. He didn't respond to an e-mail Thursday seeking comment.

Islandia-based Computer Associates is expected to name a permanent CEO within the next month to 45 days, and at least three directors, including chairman Lewis Ranieri, have issued remarks indicating they would support Cron. The board has said a CEO search is nearing completion.

Another candidate for the job hails from IBM, they said. CA declined to discuss specifics of the CEO search.

"There are a number of candidates," spokesman Dan Kaferle said. "The board search committee is doing its work. We hope to have a permanent CEO in 30 days."

A representative for one large institutional holder of CA shares said while Cron may be short on technical knowledge, his efforts in stabilizing CA during turbulent government probes and a recent settlement warrant his strong consideration for the permanent post.

"We think Ken Cron has done an extraordinarily good job and has very much to contribute," the person said. "We could see an alternative where Ken is complemented with a person with a strong technical background," possibly through the addition of a president.

Cron has served as CEO on an interim basis since April, when Sanjay Kumar stepped down amid a widening accounting scandal. Kumar also held the role of president. Kumar, who cut ties to the company in June, was indicted last week on securities fraud and obstruction of justice charges. He pleaded not guilty.

Another person familiar with the board's search said Walter Haefner, who owns 21 percent of CA's shares, also has expressed a desire to see Cron remain in the post. Calls to his office in Switzerland weren't answered last night.

Copyright 2004, Newsday, Inc.



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