Charles Wang - Computer Associates

Computer Associates

In building Computer Associates, Wang engaged in fifty takeovers, many of which were followed by the immediate termination of top management and key employees. His strategies had provoked descriptions like "rapacious," "heartless" and "Attila-the-Hun" -- largely driven by the draconian practices he engaged in with acquired companies, although these tactics were legal in the State of New York. The most notorious of these practices included forcing the employees of an acquired company to sign new employment contracts on-the-spot at a company meeting without prior warning. Employees who refused to sign at that meeting or wished to have the contracts reviewed by a third party prior to signing were immediately fired. As a result of these and other practices, Wang's career as CEO of was marked with controversy.

He is also said to have alienated many in and out of CA by his paternalistic, family-oriented management style. CA did, however, hire several women and promoted them to management positions. In 1979, three years after CA's founding, Wang had installed his older brother Tony, a one-time corporate lawyer, as president and COO. Tony held the position until his retirement in 1992 to make way for Sanjay Kumar, who joined CA via its 1987 acquisition of archrival Uccel Corporation. In 1998, Nancy Li, Charles Wang's second wife, was named CA's chief technology officer ("CTO"). Wang has argued that the investment community was punishing CA's stock because of his refusal to override his sense of familial loyalty to avoid the appearance of nepotism.

In 1998, Wang had initiated a $9 billion hostile tender offer for the shares of Computer Sciences Corporation (CSC). The Washington Post weighed in on the side of CSC's management by alluding to CA's "ties to foreigners." It was a pointed reference to Wang's origin and CA's clients in China. The suggestion was that becoming linked with CA would jeopardize CSC's contracts with U.S. government agencies. Wang dropped the tender offer, blaming the uproar on racism and inflated national security concerns.

In 2000, a class-action lawsuit accused Wang, then president Sanjay Kumar and co-founder Russell Artzt of wrongly reporting more than $2.5 billion in revenue in its 1997, 1998, 1999, and 2000 fiscal (April through March) years, in order to artificially inflate the stock price. A previous stock option set in 1995 specified that a certain number of shares would vest when Computer Associates' shares sustained a target price. The benchmark was met in 1998, and the three executives combined received nearly $1 billion in Computer Associates stock with Wang himself netting $700 million; he had already been the highest paid CEO in the US for the past four years. Since then, at least four other class-action suits have been filed against Computer Associates, all of which have named Wang specifically. As the controversy continued to dog Wang even after he returned a portion of the stock award, he quit as CEO in 2000, and later resigned as Chairman of the Board in 2002.

His successor Sanjay Kumar resigned as chairman and chief executive in April 2004, following an investigation into the accounting scandal which improperly reported revenue. A federal grand jury in Brooklyn indicted Kumar on fraud charges on September 22, 2004. Kumar pled guilty to obstruction of justice and securities fraud charges on April 24, 2006.