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Wed, Nov 24, 2004 - Page 12 News List

Computer Associates to choose new CEO

NY TIMES NEWS SERVICE , NEW YORK

Computer Associates International was expected to announce yesterday that its new chief executive will be John Swainson, an IBM executive with strong technical and sales credentials but who is untested in leading a business the size of Computer Associates, which has 15,000 employees.

Swainson, 50, left IBM about a week ago to prepare to take the top job at Computer Associates, the troubled software company, said a person with knowledge of Swainson's plans. Neither Computer Associates nor IBM would comment Monday evening on the expected appointment of Swainson.

Swainson assumes control over a company that is emerging from an accounting scandal, barely sidestepped criminal indictment and whose long-time leaders have been forced out.

Now Swainson, according to industry analysts, must repair relations with customers and find new sources of growth for a company that primarily sells software which corporations use on old-line mainframe computers.

"The long-term challenge for Computer Associates will be to make the strategic shift so it can grow beyond the mainframe world," said Kevin Buttigieg, an analyst at AG Edwards.

Still, Swainson should have the opportunity to plan a long-term future for Computer Associates, which is based in Islandia, New York. The company settled federal charges of accounting fraud in September for misreporting US$2.2 billion in revenues. Unlike other companies tainted by accounting scandals in recent years, such as Enron and WorldCom, Computer Associates is not facing bankruptcy.

In the fiscal year ending next March, the company will report profits of roughly US$500 million on sales of US$3.5 billion, Buttigieg estimated.

Swainson, who is Canadian, joined IBM as a systems engineer in Toronto in 1978.

Over the years, he rose to become the head of the company's research laboratory in Canada and later oversaw the development of software products.

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