Are the Tyco executives criminals?
The Tyco CEO and CFO are in the news right now after a mistrial (story). Allegedly they looted $600 million from the company. This sounds bad but if you look at this profile of Tyco, the $600 mil is less than the most recent quarter’s income of $720 million and only about 1% of the company’s market value of $58 billion. Let’s compare that to some other looters in the news:
- Richard Grasso took $200 million or so that he took from the New York Stock Exchange, a non-profit org. Grasso’s haul is roughly comparable to ten years of profits for the NYSE. Grasso got his looting approved by his friends on the Board and therefore won’t face criminal prosecution though the NY State attorney general is trying to force him to repay some of his booty.
- Jack Welch, in his autobiography, talks about having transferred 30 percent of General Electric from the investors into the hands of “employees” (the lions share to himself and a few other top guys presumably).
- William T. Esrey and Ronald LeMay looted $311 million in one year alone from Sprint, about half of the company’s profits in a good year. They were not prosecuted for their looting but the IRS became upset with their scheme to avoid paying any taxes on this income.
From the very fact of their prosecution we can infer that the Tyco guys did not dot their i’s and cross their t’s as effectively as the average corporate looter but is there any evidence that their looting was above average?
