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For referenced proxy voting reports, see:

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September 18, 2006 Annual Meeting

Glass Lewis & Co.

Institutional Shareholder Services (ISS)

PROXY Governance, Inc.




CA wants funds from ex-execs

Recovery of millions among software company's goals as shareholders re-elect 11 directors, including embattled D'Amato
Newsday Staff Writer

September 19, 2006

CA Inc., acknowledging a year of progress and miscues at its annual shareholders meeting yesterday, laid out a three-year plan that aspires to boost revenue from $4 billion to $6billion and disclosed a new effort to pursue ill-gotten gains from past executives.

Shareholders voted to re-elect all 11 directors, including former U.S. Sen. Alfonse D'Amato, who had been a target of three proxy-advising services that recommended votes for him be withheld (26 percent of the shareholders chose to withhold votes for D'Amato this year, compared with around 8 percent last year).

Shareholders also rejected a proposal requiring shareholder ratification of a poison pill plan and voted to retain outside auditor KPMG, which one advising firm recommended against.

In an interview after the meeting, D'Amato dismissed calls for his ouster, saying the software company under his directorship had "come a long way" from its scandal-ridden past, and that he and chairman Lewis Ranieri "played a key role in moving the company in the right direction."

Slipping his arm around board member Laura Unger, "my friend and colleague," he noted he'd also played a role in bringing in prestigious new directors (Unger is a former SEC commissioner) and said the company had gone a long way toward fulfilling the requirements of its deferred prosecution agreement after its $2.2-billion accounting scandal.

Asked if he'd step down from the board next year when his eight-year term is up, D'Amato said, "We'll look at that when the time arises." CA's board last year passed a measure that allows it to waive the term limits at its discretion. D'Amato has been on the board since 1999.

Shareholders at the meeting seemed divided about D'Amato.

"I don't like him as an individual," said a 10-year Manhattan shareholder who identified herself only as Audrey, owner of 8,000 shares. "I don't see these people who have names, what they are actually doing. They do nothing in terms of protecting shareholders."

Countered shareholder John Stepic of Englewood Cliffs, N.J., "I support the board of directors, and I don't blame D'Amato." Instead, Stepic said he hopes CA gets taken over by another company.

Chief executive John Swainson, in an interview with reporters after the board meeting, said a special litigation committee of the board will finish a report perhaps by month's end detailing how it plans to pursue ill-gotten gains from past executives, particularly those who pleaded guilty to wrongdoing. He said the company believes any proceeds recovered, amounting to possibly hundreds of millions of dollars, should go to shareholders "one way or another."

He noted that the committee already had initiated discussions with some of those charged.

Swainson acknowledged the impact of cost-cutting and layoffs on company morale but said the measures were needed.

"The goal is to get a team that's deeply committed to the long-term success of CA," he said. "I believe we're basically there," he said, though he predicted, "I believe you might see some more people leave."

CA may still spin off smaller elements of its business sectors, but Swainson declined to specify them. He said CA's team of lower-cost software developers in India has swelled to 1,300 people - the capacity of CA's building there.

Swainson acknowledged the difficulty of canceling such company institutions as the free employee breakfast and free towels at the company gym. But, he said, "It becomes a choice between keeping people and keeping breakfast," which cost $2.2 million a year. CA is eliminating 1,700 positions.

One free CA breakfast that was revived was that at the shareholders meeting, where investors last year raised loud protests over the lack of food.

Chairman Ranieri explained, "We learned last year that morning meetings and empty stomachs don't go well together."


Copyright Newsday Inc.



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