Tyco Case Study

In: Business and Management

Submitted By mikeyron07
Words 749
Pages 3
Tyco: I’m Sure That It’s A Really Nice Shower Curtain.

Tyco’s CEO Dennis Kozlowski, in 2000 was considered the highest paid CEO in America with an income of $105 million. Kozlowski started his journey at Tyco as an internal Auditor on 1975 and by 1992 he was the CEO of Tyco International. Like any other CEO, I believe Kozlowski just wanted to grow his company and be the best he could be. His bold statement of wanting to be the next General Electric evidences this point. He grew the company from a $2 billion company when he assumed power to a conglomerate with a market capitalization of $120 billion and annual sales of $36 billion. I believe in the midst of all this success, Kozlowski began to feel too important and too greedy. When he began manipulating documents to cover up his dirty tracks and wasn’t penalized, it made him feel more invincible to authorities. Being the highest paid CEO in the country at the time, you would think $1 million in taxes shouldn’t be a problem. But dislike for taxes and his greedy nature probably prompted him to evade on the taxes for the artwork. Kozlowski was convicted in 2005 for purchasing artwork for approximately $14.7 million with Tyco funds for his personal use, receiving $81 million in unauthorized bonuses and also for paying hush money to any employee with knowledge of the scheme he was carrying out in the company. Kozlowski’s decision to try and evade the New York taxes on the artworks he purchased was what blew the scheme wide open to the public. It was alleged that Kozlowski paid huge compensations to employees like the CFO Mark Swartz, and Tyco’s legal counsel Mark Belnick and some board of directors who weren’t named.
The author also questions the impact; control and oversight the Board of Directors had over Kozlowski’s dealings and the financials of the company. Since Kozlowski was good friends with some of the…...

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