CA deflates Kumar's golden parachute
The former chief executive lost more than his job when he resigned from the troubled company.
According to financial documents filed by CA with the Securities and Exchange Commission on Thursday, Kumar forfeited $7.56 million in restricted stock when he left the company. The business software maker also reported in the financial statement that it would withhold payment to Kumar of a $1 million bonus, along with other unspecified severance compensation, until after the federal government has finished its investigation into CA's $2.2 billion accounting scandal.
The loss of Kumar's 281,300 shares represents over half of the 521,022 total shares in CA that he controlled as of May 2004, and the shift accompanies a rising tide of blame that is engulfing the former executive as his company's problems are aired publicly. Kumar, who is also co-owner of the New York Islanders, a National Hockey League team, along with CA founder Charles Wang, was at the company's helm throughout the period in 2000 and 2001, when it is accused by the SEC of having engaged in a "widespread" practice of improperly recognizing revenue.
Despite the fact that compensation of top executives, including that of Kumar, was tied to stock performance during the time of the purported accounting malfeasance, the former CEO has escaped much of the blame for the scandal up to this point. Four other former CA executives have pleaded guilty this year to charges including securities fraud and obstruction. However, when Kumar walked away from his newly created position of chief software architect in June, it became clear that he had not been able to go through the situation completely unscathed.
In late June, an investment group led by Texas investor Sam Wyly filed a lawsuit in a bid to recoup more than $1 billion from 10 former and current CA executives, including Kumar and Wang. The suit seeks money that the plaintiffs claim was paid to executives of the software company in cash, stock options and restricted stock based on erroneous financial reporting.
Also in its filing Thursday, CA reported the naming of former SEC commissioner Laura Unger to its board of directors.