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CA's Judgment Day

Computer Associates' leadership hangs in the balance, with a preliminary vote tally expected Wednesday.

Technology companies often talk about increasing customer and shareholder value. But it isn't common to see that measurement in a proxy vote; that's about as rare as a full solar eclipse. But that's exactly what the technology industry is going to witness Wednesday, as a two-month battle for the heart of Computer Associates comes to a close. It's time to count votes.

While the final vote tally for the battle for the fourth-largest independent software company (CA is worth $4.1 billion) won't be official for several weeks, the preliminary votes from CA's annual shareholder's meeting will be revealed Wednesday.

Billionaire Sam Wyly hopes to oust CA founder and chairman Charles Wang, former U.S. Sen. Alfonse D'Amato, co-founder and executive VP Russell Artzt, and board member Willem de Vogel. Analysts estimate that Wang is backed by CA's largest shareholder, Walter Haefner, the current board, and company execs, who hold roughly 30% of the votes. Wyly, as Wang is fond of pointing out, holds 100 CA shares.

Aside from board changes, Wyly's plan includes splitting CA into four divisions, as well as spinning off new units into entirely separate companies. Wang referred to that plan as "Mickey Mouse" at CA's annual end-user conference in July.

Michael Dortch, principal analyst with the Robert Frances Group, says, "The real question is not what the outcome of the vote is going to be, but, what is the outcome going to be to the benefit or the detriment of CA's customers? Whether you think the Wyly alternative is better depends on whether you are a CA customer or shareholder. How his plan can help anyone but shareholders is not clear to me. This plan presents no clear benefit to CA customers."

Regarding the proxy vote, Wang has remained confident: "Our shareholders, we believe, from the smallest to the largest, will recognize the value we bring, where we are headed, and what we have done in the past 25 years. In that sense, I'm confident we will win."

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