Executives Ordered To Return Millions In Stock Grants

In a ruling that experts say is the largest giveback of executive compensation ever ordered, the Delaware Chancery Court ruled that three top executives of Computer Associates International Inc. must return 9.5 million shares of stock they received in a special incentive grant because shareholders never voted to adjust the number of shares to be awarded in the event of a stock split. The stock grants had been made under the company's Key Employee Ownership Plan which authorized the company's compensation subcommittee to grant up to six million shares to the participants if, among other things, the stock price topped $180 for 60 days in a twelve-month period. The Plan provided that the target share price would be appropriately adjusted to reflect any stock dividends or stock splits, but did not contain similar wording to cover the number of shares to be awarded to the participants after a stock split. Computer Associates said it would likely appeal the Court's ruling. (The Wall Street Journal, 11/10/99, p. C 1; The Wall Street Journal, 11/11/99, B 8; The New York Times, 11/10/99, p. C 1; The New York Times, 11/11/99, C 8)