ACS Chairman Loosens Grip

Updated from 10:22 a.m. EST

SAN FRANCISCO - The newly reconstituted board of Affiliated Computer Services (ACS Quote - Cramer on ACS - Stock Picks) announced on Monday an agreement with its powerful chairman to limit his influence over the tech services giant.

The company said that Darwin Deason, its founder and chairman, has agreed to relinquish his rights granted by his employment contract to appoint certain officers, nominate candidates for the board and recommend their dismissal.

Deason also agreed to a board proposal to cap the voting power of his current stock holdings at 45% to offset concerns that a recent authorization to buy back up to $1 billion in shares could further concentrate voting power in his hands.

Deason's current shareholders give him about 42% voting authority.

The agreements address corporate governance issues that have dogged ACS and were brought into sharp relief during a failed buyout attempt by Cerberus Capital Management in partnership with Deason. Corporate governance advocates have criticized Deason's employment contracts with the company, especially in light of concerns that he was involved in stock options backdating at the company.

The agreements announced Monday, however, don't apply to additional shares that Deason purchases in the future. This provision opens an opportunity for him to boost his voting power by acquiring more shares. On Nov. 6, Deason filed plans with the Securities and Exchange Commission to buy up to 1 million additional ACS shares.

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