Because of incorrect information from Computer Associates International Inc., five of the company's outside board members -- including Richard Grasso, the head of the New York Stock Exchange (NYSE) -- failed to disclose that they owned deferred stock in the company, as required by the U.S. Securities and Exchange Commission (SEC).
The company said in a statement this week that it didn't think outside directors needed to file "beneficial ownership" documents with the SEC using a Form 5.
"All director compensation has been fully disclosed in our annual proxy statements," CA said in a statement. "Because director compensation is deferred until retirement, we and our directors did not believe that a Form 5 filing was necessary. We have recently been advised that such filings by our directors should be amended to comply and correspond with the proxy disclosure. This is a technicality, and in no way does this have any impact on the company's reported financials."
A CA spokeswoman said the company changed its decision on advice of its outside counsel, meaning Grasso and the other outside directors had to file ownership reports for this year and past years. Grasso filed a report disclosing his ownership of 6,326 deferred shares of CA stock on Aug. 15, according to the CA spokeswoman.
The other outside directors are former U.S. Sen. Alfonse D'Amato of New York; Shirley Strum Kenny, president of the State University of New York at Stony Brook; Roel Pieper, chairman of London-based Favonius Ventures; and Willem de Vogel, a partner at Three Cities Research Inc. in New York.
Grasso, who has served on the CA board since 1994, and three of the outside board members are leaving the board today. D'Amato is the only outside director remaining.
The NYSE said Grasso would have no comment.
Questions about CA's accounting practices are part of an ongoing federal probe.