The deferred prosecution agreement -- which included a $225 million restitution fund and the appointment of an independent examiner to CA -- was scheduled to be completed in September. However, CA said that "in light of the internal control issues relating to sales commissions, income tax provisions, its internal control environment and other factors, it expects that the term of the Independent Examiner may be extended beyond September 30, 2006."
Six days after announcing the commission debacle, CA unveiled sweeping changes to its sales management team that included the removal of its head of worldwide sales Gregory Corgan, and the reappointment of Executive Vice President Gary Quinn to the role of head of CA's indirect business operations. Quinn is a 21-year CA veteran who for several years defined CA's channel strategy as executive vice president of partner advocacy before shifting a year or so ago to a position as head CA's SMB and consumer operations.
On the news that Quinn again had the helm of CA's channel program, CA COO Michael Christenson said in a statement that he expected to see CA's indirect sales grow from about 10 percent to around 20 percent to 30 percent over the next few years. Christenson said progress in increasing the percentage of indirect sales should become noticeable in the forth quarter.
In April 2004, Quinn made a similar statement, saying he expected to see CA's indirect sales grow to about 30 percent.
Meanwhile, many CA shareholders are unsettled. A group of CA investors tried again on May 13 to get a proposal on CA's upcoming proxy ballot to vote for the removal of two of the Islandia, N.Y. vendor's board members: Chairman Lewis Ranieri and former New York Senator Alfonse D'Amato.
The attempt, made in a letter to the SEC from Cornish Hitchcock, a lawyer representing Amalgamated Bank Long View Collective Investment Fund, New York, which holds some 245,530 shares of CA stock, charges that since the two board members were around during the time of CA's accounting scam, they should go.
It is "important to replace those directors who served during the period of misconduct, who continued on the board during the board's failure to effectively investigate accounting issues that were raised in 2001 newspaper reports and government investigations, and whose initial response was merely to demote the CEO and offer a $10 million payment to end the law enforcement inquiries," the letter reads.
"We believe (CA) stock will continue to trade lower in the near term as investors await better visibility into the company's operations and strategic direction," wrote John Rizzuto, and equity researcher with Lazzard Capital Markets, New York.
CA on Thursday also announced a stock repurchase plan that enables it to buy back $2 billion of its common stock in its current fiscal year ending March 31, 2007.