San Diego Union Tribune
June 9, 2007
Auditor issue stirs 1st SAIC stockholders' meeting
By Paul M. Krawzak
– During its first stockholders' meeting as a publicly traded
company, SAIC yesterday shortened its board members' terms to
one year and defended its rehiring of an independent auditor.
Diego-based defense contractor, also known as Science
Applications International Corp., re-elected three board
members, including CEO Ken Dahlberg, who doubles as chairman of
the board and is now the only employee of the company who sits
on the board.
company also added retired Air Force Gen. John P. Jumper to the
board to replace J.P. Walkush, an executive vice president at
shareholders showed up for the meeting, which proceeded smoothly
without any objection until Ralph Siver, a shareholder and
former employee, stood up.
questioned the reappointment of Deloitte & Touche LLP to perform
the yearly audit.
accounting firm has served as SAIC's independent auditor for
several years, Siver said not changing auditors could lead to
“too close of contact” between the auditor and company,
compromising the integrity of the audit.
of our holdings in the company are most sensitive to our
reputation,” Siver said.
Demisch, a board member who serves on the board's audit
committee, responded that the practice of changing the Deloitte
managing partner in charge of the audit every five years
prevents undue familiarity from developing between employees and
said he was reluctant to change auditors frequently because SAIC
is “not a simple company.”
complex, it is difficult, it is lots and lots of judgment,” he
meeting, Dahlberg said he was pleased the proposal to shorten
board members' terms received the necessary two-thirds vote to
good governance that we have all directors stand for annual
elections,” he said.
also defended the transition away from past boards that had
heavy representation from company executives.
independent directors with a variety of skill mix and
experiences helps me, helps the company better develop a
strategy for long-term success,” he said.
said the consolidation of several classes of employee-owned
preferred stock into a single series would not have any impact
on the owners. The stock was separated into four series, each
with a different date when it could be sold, to promote orderly
trading when the company went public last year, according to
SAIC financial statements.
plan, all of the stock would have been able to be sold as of
Oct. 8. That will not change under the consolidation.
stock closed at $18.04 per share, up 7 cents.