Even after being convicted for bilking his former employer for millions, one ex-executive is suing the company from behind bars, claiming he's still owed money.
Mark Swartz, former Chief Financial Officer of Tyco International, is now suing his ex-employer for about $60 million in retirement agreements and tax reimbursements, Reuters reports (h/t New York Post). In 2005, Swartz and then-CEO Dennis Kozlowski were sentenced to up to 25 years in prison for grand larceny, securities fraud and other charges. The two allegedly looted Tyco for more than $600 million, using the money for lavish parties, a luxurious apartment and other extravagant expenses.
Swartz’s lawsuit claims that he agreed on his retirement package with Tyco even as the company was aware that he would soon be charged by the Manhattan District Attorney’s office in 2002, and that the value of the package wasn't included in the funds that he stole from the company. Tyco disagrees, saying it “know[s] of no basis on which Swartz could recover from the company," according to CFOWorld.
Swartz and Kozlowski -- who once owned a $6,000 shower curtain -- became symbols of corporate greed for the hundreds of millions of dollars they took personally from Tyco, while claiming they were unaware of any wrongdoing. Last month, Kozlowski was denied parole, even as he admitted that he was “living in a CEO-type bubble” with a “strong sense of entitlement” that led him to rationalize taking such huge sums from the company, NJ.com reports.
Such CEO bubbles continue to live on. In 2010, executive pay at major publicly traded companies leapt 28 percent, while that of the average worker increased less than one percentage point. While executive compensation grew at a slower pace last year, CEOs still made on average almost 400 times what most Americans make. Likewise, the number of CEOs making $50 million or more hit an “unprecedented” level in 2011.
Among them is current Tyco CEO Edward Breen, whose total compensation including equity was around $63 million last year, according to The Guardian, $6 million more than Swartz is currently suing for.Despite the vast majority of shareholders agreeing with the amount executives were paid last year, there are subtle signs of a turning tide. Last month, only 45 percent of Citigroup shareholders voted in favor of CEO Vikram Pandit’s pay package. More recently, CEO Andrew Moss of the UK’s largest insurer Aviva resigned after facing criticism from shareholders over the value of his compensation. Shareholders also rebuked pay packages at health insurance giant WellPoint and three banks, Barclays, Credit Suisse and FirstMerit.