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    15 Dennis Kozlowski Living Large

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    damian
    Dennis Kozlowski rose from modest means to become the CEO of Tyco International in 1992. As CEO, he rapidly grew the company through strategic acquisitions, though Tyco struggled as the economy slowed. Kozlowski gained notoriety for his lavish lifestyle, as Tyco allegedly paid for his $30 million apartment and $1 million birthday party. In 2002, Kozlowski left Tyco amid controversy over his $81 million in bonuses and was later convicted of looting over $600 million from the company, though some questioned the trial and conviction.

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    15 Dennis Kozlowski Living Large

    Uploaded by

    damian
    29 views2 pages
    Dennis Kozlowski rose from modest means to become the CEO of Tyco International in 1992. As CEO, he rapidly grew the company through strategic acquisitions, though Tyco struggled as the economy slowed. Kozlowski gained notoriety for his lavish lifestyle, as Tyco allegedly paid for his $30 million apartment and $1 million birthday party. In 2002, Kozlowski left Tyco amid controversy over his $81 million in bonuses and was later convicted of looting over $600 million from the company, though some questioned the trial and conviction.

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    15-Dennis-Kozlowski-Living-Large

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    Dennis Kozlowski rose from modest means to become the CEO of Tyco International in 1992. As CEO, he rapidly grew the company through strategic acquisitions, though Tyco struggled as the economy slowed. Kozlowski gained notoriety for his lavish lifestyle, as Tyco allegedly paid for his $30 million apartment and $1 million birthday party. In 2002, Kozlowski left Tyco amid controversy over his $81 million in bonuses and was later convicted of looting over $600 million from the company, though some questioned the trial and conviction.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    29 views2 pages

    15 Dennis Kozlowski Living Large

    Uploaded by

    damian
    Dennis Kozlowski rose from modest means to become the CEO of Tyco International in 1992. As CEO, he rapidly grew the company through strategic acquisitions, though Tyco struggled as the economy slowed. Kozlowski gained notoriety for his lavish lifestyle, as Tyco allegedly paid for his $30 million apartment and $1 million birthday party. In 2002, Kozlowski left Tyco amid controversy over his $81 million in bonuses and was later convicted of looting over $600 million from the company, though some questioned the trial and conviction.

    Copyright:

    © All Rights Reserved
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    of 2

    Dennis Kozlowski: Living Large

    Dennis Kozlowski came from modest circumstances. He began his career at Tyco International in 1975
    as an auditor, and worked his way up the corporate ladder to become CEO in 1992. Kozlowski gained
    notoriety as CEO for the rapid growth and success of the company, as well as his extravagant lifestyle.
    He left the company in 2002 amid controversy surrounding his compensation and personal spending.
    In 2005, Kozlowski was convicted of crimes in relation to alleged unauthorized bonuses of $81 million,
    in addition to other large purchases and investments.

    As CEO, Kozlowski was lauded for his risk-taking and the immense growth of the company. He
    launched a series of strategic mergers and acquisitions, rapidly building up the size of Tyco. During his
    first six years as CEO, he secured 88 deals worth over $15 billion. Strong growth was bolstered by a
    booming economy, and Tyco’s stock price soared as the company consistently beat Wall Street’s
    expectations. However, when the economy slowed, the company began to struggle.

    Allegedly, Tyco paid for Kozlowski’s $30 million New York apartment, as well as personal gifts and
    parties, including $1 million of a $2 million birthday party for his wife. After Kozlowski paid a $20
    million finding fee to a board member without proper approval, and paintings invoiced for Tyco offices
    ended up in Kozlowski’s apartment (among other irregularities), Kozlowski was criminally charged with
    looting more than $600 million of assets from Tyco and its shareholders.

    While many questioned his lifestyle, others questioned the trial and conviction. Commenting on the
    case, civil rights lawyer Dan Ackman wrote, “It’s fair to say that Kozlowski…abused many corporate
    prerogatives… Still, the larceny charges at the heart of the case did
    not depend on whether the defendants took the money—they
    did—but whether they were authorized to take it.” Kozlowski
    asserted his innocence of the charges, stating, “There was no
    criminal intent here. Nothing was hidden. There were no shredded
    documents. All the information the prosecutors got was directly off
    the books and records of the company.”

    Discussion Questions:

    1) Do you think Dennis Kozlowski was an effective leader for Tyco International? Were his actions
    ethically permissible? Why or why not?

    2) As CEO of a major company, how might entitlement bias have affected Kozlowski’s behavior?

    3) What rationalizations do you think Kozlowski might have used to justify his behavior in his own
    mind?

    Case Study – Dennis Kozlowski: Living Large - Page 1 of 2


    4) If you were in Kozlowski’s position, how do you think your actions would affect the behavior of
    your employees? Why?

    5) Can you think of any other examples of leaders who have abused the power of their position?
    What similarities and differences do you see between them and Kozlowski?

    Resources:

    Testosterone Inc.: Tales of CEOs Gone Wild


    http://www.worldcat.org/title/testosterone-inc-tales-of-ceos-gone-wild/oclc/54503986
    Deal-a-Month Dennis
    http://www.forbes.com/forbes/1998/0615/6112066a.html
    Tyco’s ‘Piggy,’ Out of Prison and Living Small
    http://www.nytimes.com/2015/03/02/business/dealbook/dennis-kozlowskis-path-from-infamy-to-
    obscurity.html
    What Happens after You Serve Your White-Collar Prison Sentence?
    http://www.vanityfair.com/news/2015/03/dennis-kozlowski-life-after-prison
    Dennis Kozlowski Was Not a Thief
    https://hbr.org/2014/01/dennis-kozlowski-was-not-a-thief/
    Taking Down the Lion: The Triumphant Rise and Tragic Fall of Tyco’s Dennis Kozlowski
    http://www.worldcat.org/title/taking-down-the-lion-the-triumphant-rise-and-tragic-fall-of-tycos-
    dennis-kozlowski/oclc/852658404
    Dennis Kozlowski: Prisoner 05A4820
    http://www.cbsnews.com/news/dennis-kozlowski-prisoner-05a4820/
    Tyco Trial II: Verdict First, Law Second
    http://www.forbes.com/home/business/2005/06/17/kozlowski-tyco-verdict-
    cx_da_0617tycoverdict.html

    Author:
    Robert Prentice, J.D.
    Department of Business, Government and Society
    McCombs School of Business
    The University of Texas at Austin

    Case Study – Dennis Kozlowski: Living Large - Page 2 of 2

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