Former Tyco execs watch portfolios grow while in prison…
It’s no secret that the markets have been in the dumps with the S&P 500 down over 41% year-to-date. Still, it’s good to know that some people are making money in the current market, even if those folks happen to be guests of the New York State Department of Corrections.
That’s right: Dennis Kozlowski (aka Prison ID 05A4820) and Mark Swartz aka (Prison ID 05A4823) — the two former top executives of Tyco (TYC) — have seen their executive retirements blossom while they’re sitting in their respective prison cells, according to a footnote buried deep in the 10K that Tyco filed last week.
In footnote #16, which is on pg. 150 of the 10K, Tyco discloses that the accrued benefit obligations for Kozlowski’s executive retirement, which he theoretically gets to collect when he turns 65, grew to $76 million for the year ended Sept. 28, 2008. That’s an increase of $5 million or a market-beating 7% (compared with the 20% the S&P 500 lost during the same period). Swartz did slightly better with $36 million turning into $39 million — an 8.3% return.
Of course, it’s not really clear that the two men will ever get a chance to collect. As Tyco notes in the footnote, it may be accounting for the money, known as “Executive Retirement Arrangements”, but “amounts owed to Messrs. Kozlowski and Swartz under the ERA are in dispute by the Company.” Still, given the current climate, it’s not a bad return.
One other quick note about Kozlowski. He recently gave an interview to Fox Business News about his take on the current market meltdown. “Why am I sitting here? Tyco is still a viable company, still alive and kicking,” he said. “Bear Stearns is under, Lehman Brothers is under. Merrill Lynch had to be acquired. There are all kinds of banks going under right now.”
We happened to stumble upon Tyco’s footnote as we were working on a more detailed post about pension obligations for FootnotedPro, our subscription-only site. We’ll be posting that note later this morning and hope you’ll think about subscribing during this introductory period.
Wishing footnoted readers new and old a wonderful Thanksgiving. Given all the leftovers, it’s the brain’s favorite holiday! We’ll be back on Monday.
Image Soure: Mugshots.com
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Posted in Tags: 10Ks |
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November 26th, 2008 at 10:51 am
Hah, that’s a great point. Either he should be released, or he should have a hell of a lot of new company.
November 26th, 2008 at 11:14 am
Someone emailed this to me.Don’t know if it is true,but judging from my savings it could be.
Thought we could use something to cheer us up in the economically hard times.
RETIREMENT INCOME
If you had purchased $1,000 of AIG stock one year ago, you would have $42 left. With Lehman, you would have
$6.60 left. With Fannie or Freddie, you would have less than $5 left. But if you had purchased $1,000 worth of
beer one year ago, drank all of the beer then turned in the cans for the aluminum recycling REFUND, you would have had $214.
Based on the above, the best current investment advice is to drink heavily and recycle.
It’s called the 401-Keg…..