Until last week, it seemed that Computer Associates International Inc. (CA) shareholder Sam Wyly faced impossibly long odds in his battle to shake up the company's board of directors. Analysts said his attempt to oust CA's entire board and install 10 nominees of his own choosing was almost certain to end in failure; a pair of influential investor advisory firms recommended against supporting Wyly's planned coup.

Then Wyly changed tactics, revising his proxy bid to seek only minority representation on CA's board -- and the playing field tilted. Advisory firms Proxy Monitor Inc. and Institutional Shareholder Services Inc. (ISS) reversed their recommendations and threw their support behind the short slate of four nominees fielded by Ranger Governance Ltd., Wyly's investment firm and the vehicle he is using for the proxy fight. It's uncertain how much weight the advisory firms' recommendations will carry, but their reports, coupled with widespread shareholder frustration with some aspects of CA's management, leave the outcome of next week's vote tabulation in doubt.

The results of the board of directors election will be announced next Wednesday, at CA's annual meeting with shareholders.

CA's fate rests in the hands of the company's institutional investors, who collectively own 55 percent of the company. Those investors -- and the Wall Street analysts who advise them -- are mostly staying quiet.

CA appears to have around 30 percent of the shareholder votes locked up. Management controls roughly 7 percent of the company's voting shares. Swiss investor Walter Haefner, CA's largest shareholder, owns 21 percent of the company and has pledged to vote for the incumbent board of directors.

FMR Corp. (better known as Fidelity Investments) is CA's largest institutional investor, with a 9.2 percent ownership stake in the company. Fidelity -- along with many other institutional CA shareholders -- has declined to comment on the proxy fight. But Fidelity's ties to CA run deep, and the firm appears unlikely to support shaking up the current regime. In addition to its ownership stake, Fidelity administrates CA's 401(k) retirement plan for employees.

A few smaller stakeholders have publicly taken sides. The California Public Employees' Retirement System (Calpers) announced last week that it will vote its 3.12 million shares (less than half a percent of CA's outstanding stock) in favor of Ranger Governance's nominees. The New York State Common Retirement Fund said Thursday that its 1.49 million shares will be voted for the incumbent directors.

Investors' concerns about CA largely stem from the company's market performance and from a stock option grant awarded to a trio of CA executives in 1995.

Despite enjoying a rally since the start of the year, CA's stock is down 3 percent over a five-year period, drastically under-performing both market indices and many of its competitors. That sagging share price heightened criticism of a stock-option award the board granted CA executives Charles Wang (the company's co-founder and chairman), Sanjay Kumar, and Russell Artzt in 1995. The granted shares were to vest when the company's stock hit and sustained a target price. That benchmark was reached in May 1998, and the three executives collected a combined total of nearly $1 billion in stock.

But news of slowing sales soon dragged down CA's share price, and furious investors accused CA of manipulating its accounting to push the share price up to the grant's vesting price. The executives later returned a large portion of the shares from the grant to settle a shareholder lawsuit.

Wang and Artzt are among the directors Ranger hopes to unseat. It's also gunning for former U.S. Senator Alfonse D'Amato and investment firm partner Willem de Vogel, CA's longest-serving outside director. Both de Vogel and D'Amato sit on the compensation committee that approved the 1995 stock option grant. Ranger is no longer seeking to replace Sanjay Kumar, now CA's chief executive officer.

ISS said in its initial report on the CA proxy fight that while CA's corporate governance flaws "are chiefly confined to this single instance of overcompensation, the magnitude of the offense is so great that ISS would almost certainly have supported the election of a 'short slate' of dissident directors if Mr. Wyly had chosen to seek minority representation."

In its updated analysis and recommendation, issued after Wyly's proxy bid was revised to seek fewer seeks on the board, ISS said it applauds the steps Kumar is taking to add independent voices to the company's board, but that more radical changes are needed.

"CA is much in need of a clean break from its past, and in particular from the influence of Mr. Wang, whose continued presence on the board depresses investor confidence in the progress being made," ISS wrote. "The company's poor stock performance over the past several years appears to be attributable at least in part to continuing concerns about management."

Proxy Monitor said it considers CA "a poorly governed company," and suggested that replacing Wang and three other longtime directors "would bring a welcome breath of fresh air to the board."

Wyly's decision to remove himself from Ranger's slate of nominees helped assuage some shareholder concerns, the advisory firms said. Wyly has had his own tangles with corporate governance issues during his tenure as chairman of crafts retailer Michaels Stores Inc., a position he recently turned over to his brother.

Wyly initially focused his campaign for control of CA on a new business model he said his board would adopt, breaking CA into four independent units focusing on storage management, security management, systems management, and knowledge management. The plan was savaged by both CA and independent analysts, who said that much of the company's strength lies in its breadth of product offerings. If Ranger succeeds in its new plan and lands minority representation on CA's board, it would be harder for the group to so radically shift CA's direction -- although Ranger's nominees say they still believe the plan has merit, and would be interested in discussing it with the board.

The dissident group also pledged that if elected, it would push the board to thoroughly review CA's corporate governance policies and customer relations.

Wyly has said previously that this proxy bid is a one-time campaign and that he has no plans to wage another fight next year. But the tenor of the battle has grown increasingly heated, and the possibility remains that either side could challenge the outcome of next week's vote.

CA filed suit against Wyly soon after he began his campaign, alleging that his actions violate a non-compete agreement he signed after selling Sterling Software International Inc. to CA in 2000. Ranger countersued, charging Wang and Kumar with making a host of false and misleading statements. Ranger recently amended its suit, adding accusations of full-disclosure law violations and asking the court to block Wang, Kumar and Haefner from casting votes in the board election.

Those legal issues could linger long after the shareholder meeting. Neither side was willing to comment on whether it might use legal channels to challenge the election's results.

CA's shareholder meeting is scheduled for next Wednesday, Aug. 29, at the company's headquarters in Islandia, New York.