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IBM executive expected to be named CA chief

BY MARK HARRINGTON
STAFF WRITER

November 22, 2004

Computer Associates International Inc. is expected this week to announce a succession plan for its chief executive post in which a top IBM executive will assume the role now held by Kenneth Cron, sources said.

The transition between CEOs is expected to take place over the next several months, sources said. The sources declined to identify the IBM executive.

The CEO succession plan would resolve a major point of uncertainty for the Islandia software giant, whose past chairman and CEO, Sanjay Kumar, resigned in April amid a $2.2 billion accounting scandal.

Kumar in September was indicted on 10 counts of securities fraud, conspiracy and obstruction of justice. He has pleaded not guilty to the charges.

Cron, a CA board member since 2002, took the CEO role on an interim basis in April. After initially indicating he wasn't a candidate for the permanent role, Cron this summer said he would consider the post if the board requested it. Though Cron is said to have had a majority of the board's support as recently as October, sources said pressure to hire an outsider recently prevailed. A CA spokeswoman last night declined to comment.

During Cron's term, the company successfully settled government probes, replaced and reorganized upper management, acquired two companies and improved its financial performance.

Cron is expected to remain in the interim position during a transitional period that ends when his contract expires March 31, the sources said.

The CEO search was beset by government investigations that made recruiting for the top spot a difficult sell and boardroom squabbles about whether an insider or outsider was best suited to CA's situation.

A top executive of German software maker SAP AG was reported by Newsday in October to be a top outside contender, but he subsequently dropped out of the running, sources said.

Computer Associates is said to be considering postponing its giant annual user conference until 2006, separate sources said. CA had scheduled the CA World conference for April in Orlando, a date that as of yesterday was listed on its Web site.

Last month the company laid off many of the internal staffers charged with organizing the conference, which draws tens of thousands of customers, partners and internal staffers.

CA, which has been on a cost-cutting binge, could save $30 million by postponing the conference a year, the sources said.

The CA spokeswoman declined to comment on CA World plans, although she said the company has acknowledged it was "evaluating our marketing programs."

Copyright 2004, Newsday, Inc.

 

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