After two years of riding a wave of accounting criticisms and the resulting plunge in Tyco International Ltd.'s stock price, chairman and chief executive Dennis Kozlowski today abruptly resigned his position and has been replaced by John Fort, the man from whom he took over the job 10 years ago.
Kozlowski's resignation throws Tyco into a deeper controversy than it has faced over the course of this year when it first announced plans to split into four separate companies, then scuttled the plans as investors showed their disapproval of the deal by pushing down the company's stock price.
Tyco said in a statement that Kozlowski was resigning for personal reasons without providing additional information or commenting on reports in the New York Times and the Wall Street Journal that the embattled Tyco chief was being investigated for allegedly avoiding New York State taxes.
In its press release, Tyco said it expects no changes in the plan already introduced by the Kozlowski-led management, including the spin off of its CIT financial services group and the focus on growth through internal expansion at Tyco Electronics, the company's biggest operating unit. Tyco's different operating units have traditionally being managed almost as independent companies and today's development is not expected to impact the electronics business.
"I fully support the evolution of the company's long-term operating strategy to focus more on organic growth," said Fort, in the statement. "We will continue with our plans to make return on capital a key part of our compensation system along with earnings growth and cash flow."