By withdrawing its dissident slate, Oracle ( ORCL) may have killed some of the excitement surrounding PeopleSoft's ( PSFT) upcoming shareholder's meeting. But there still could be some fireworks.

On Wednesday, San Francisco-based institutional investor advisory firm Glass Lewis & Co. recommended that its clients withhold votes on three of the four directors up for reelection. The firm is also recommending support for a proposal that the company expense stock options, which is opposed by the PeopleSoft board.

The three directors that Glass Lewis says votes should be withheld for at the March 25 annual meeting are CEO Craig Conway, A. George "Skip" Battle and Cyril J. Yansouni. Glass Lewis picked Battle and Yansouni because they were both on the board's compensation committee when it awarded Conway $3.3 million in salary and bonus plus 1.5 million options in 2003.

In a proxy paper, Glass Lewis called Conway's pay "exorbitant" and gave the company's executive compensation an 'F' rating. Glass Lewis noted that Conway's pay was significantly more than the median for CEOs at two separate peer groups while the company's performance was about the same as its peers based on six financial metrics. "It appears to us that members of this compensation committee have not fulfilled their duties," the report said.

Glass Lewis recommended withholding a vote for Conway, meanwhile, because of his oversight of the company's controversial refund program employed to fend off Oracle's hostile takeover attempt. Calling the program a "quasi-poison pill," Glass Lewis noted that the more than $1.5 billion in potential costs of the money-back-guarantee program exceeds PeopleSoft's total cash and short-term investments balance of $1.4 billion.

"All of this dampens the ardor of potential PeopleSoft suitors, which clearly is to the detriment of shareholders," Glass Lewis wrote.

Oracle was initially proposing a slate of dissident directors in attempt to remove poison-pill provisions, but withdrew that slate after the Justice Department sued to block its proposed $9.4 billion acquisition of PeopleSoft on antitrust grounds. Oracle and the DOJ will face-off in a trail in June.

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