Kozlowski Says No One Worth $100 Million

Former Tyco CEO Dennis Kozlowski said in a prison interview yesterday that the company’s board had not anticipated his stock-heavy compensation would grow to more than $100 million, and that he doesn’t “believe that anybody is worth that,” according to Reuters.

 

The interview, which aired Tuesday on Fox’s “Cavuto” program, took place at the Mid-State Correctional Facility in Marcy, New York.  During the interview, Kozlowski told Fox’s Neil Cavuto that he doesn’t think anybody set out to pay him the amount of money they did, in excess of $100 million a year, according to Reuters.

 

Because of the fact that he accepted the risk of being paid primarily in stock, Koslowski also stood to benefit enormously when the company’s share price began to lift and the stock split.  “And that’s the way the board wanted it,” he told Cavuto, as reported by Reuters.  “There was a deal in place.  The deal was there, and I earned every single penny of that deal.”

 

What’s more, he added that federal legislation to cap tax deductions for CEO pay to $1 million in the early 1990s was a catalyst in starting the trend of offering CEOs performance-based stock options packages, and that boards were also to blame for CEOs of underperforming companies receiving large severance packages.

 

“I think boards have a hard time looking a CEO in the eye sometimes and saying, ‘You’re out of here,’” Kozlowski said in the interview.  “They’ve worked with this guy for a long time.  And so, in order to make themselves feel better, they throw a lot of money at them.”

 

Kozlowski, currently serving an eight-to-25-year federal prison sentence after a jury found him guilty in 2005 of grand larceny, fraud and conspiracy, was also ordered to pay restitution and fines of close to $200 million.  Regardless, he said he is not guilty and is appealing the verdict, according to Reuters.