RawGreed Ex-Tyco CEO Award

Posted on September 21, 2005 , filed under RawGreed Awards, Stocks | Print This Post

In one of the biggest cases of corporate greed in history, Ex-Tyco CEO Dennis Kozlowski was sentenced on Monday, September 19th, 2005 to 8 to 25 years in prision for stealing an estimated $600 Million from Tyco. Mr. Kozlowski reportedly spent the money on a private party for his second wife, apartments, fine art and other luxury items.

TYC, Tyco International, Ltd., engages in the design, manufacture, and distribution of electronic security and fire protection systems; electrical and electronic components; and medical devices and supplies, imaging agents, pharmaceuticals, and adult incontinence and infant care products. Its fire and security products include electronic security systems, fire detection systems, and suppression systems, as well as fire extinguishers and related products.

The stock is currently trading at 29.25 and saw little movement on todays announcement. I would avoid trading the stock until other issues such as potential shareholder lawsuits over corporate policy fail to emerge.

My only question is how did Tyco allow its Ex-CEO to get away with spending so much of its money? Tyco should be partically blamed for poor corporate governance and control policies. Mr. Kozlowski helped build a strong company but performance does not equal the right to steal from your company.