Tyco CEO's Bonus Cut Amid Compensation Scandals
In a year full of compensation scandals, 2003 ended with news that Tyco’s chief executive saw his bonus cut by more than half and received none of the nearly $19 million in restricted stock and options that he got last year, according to a proxy statement filed with the Securities and Exchange Commission.
CNN reported Friday that Edward D. Breen received a $1.5 million bonus for 2003, down significantly from the $3.78 million he received in 2002. However, his salary increased from $278,846 in 2002 to $1.5 million in 2003. But he received none of the $11.43 million in restricted stock and $7.35 million in options he received last year, the statement said.
Breen joined the company after the company was rocked by the 2002 scandal that led to the arrest of former CEO Dennis Kozlowski and chief financial officer Mark Swartz, both of whom are currently on trial in New York, facing charges they defrauded the company out of $600 million. The trial has been colored by testimony referring to Kozlowski’s lavish lifestyle.
The proxy statement, filed in advance of the company’s March 25 annual meeting, also makes reference to an upcoming proposal by the American Federation of State, County and Municipal Employees that the company incorporate in one of the 50 U.S. states, rather than in Bermuda, where it is now incorporated. AFSCME, which holds more than 324,000 shares of Tyco stock, said the Bermuda incorporation hurts the company financially and harms Tyco’s reputation.