- Summary: On October 13, 1999, a proposal was presented to Tyco's (TYC) compensation committee to grant three million options to CEO Dennis Kozlowski and finance chief Mark Swartz. The options would be priced "using the date with the lowest volume-weighted average sale price" that month. The proposal was shown to Tyco's compensation consultant, Towers Perrin, who warned that the award might constitute a "discounted option award", which would require Tyco to take a charge against earnings equal to the discount. The problematic language was subsequently crossed out, and replaced with the date following Tyco's October 15th board meeting.
- Comment on related stocks/ETFs: This is positive news for Tyco, especially after enduring all the negative publicity generated by Kozlowski. While the list of companies involved with the options backdating scandal is growing, the alleged transgressions vary significantly.
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