Tyco Loosens Performance
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In Share Awards for Executives
By JENNIFER LEVITZ
February 23, 2007; Page B5
Tyco International Ltd. revamped a plan to award
shares to top executives based on company performance and said
executives would receive most of the shares regardless of whether
revenue targets were met.
Tyco's weakening of the performance-based reward
program, which shareholder groups had lauded as a move toward improved
corporate coverage, prompted criticism from a corporate-watchdog group.
In its shareholder proxy filed with the Securities and
Exchange Commission in advance of its annual meeting next week, the
Bermuda-based conglomerate said that only one-third of awards that
previously had been pegged to corporate performance still would be. The
remaining two-thirds of the awards will vest "without regard to the
attainment of the performance metrics," the company said.
Tyco said the change was in conjunction with its
planned split into three standalone companies in the coming months.
Shareholder returns at Tyco -- a sprawling company that
makes everything from ADT burglar alarms to painkillers -- have lagged
behind those of many other multi-industry companies.
A company spokeswoman could not be immediately reached
for comment.
In a report yesterday, Proxy Governance Inc., a Vienna,
Va., firm that analyzes proxies, criticized Tyco. Shirley Westcott, the
managing director, said that even if Tyco's plans have shifted with the
breakup, "you would think they might establish something else to
maintain the performance feature of the awards instead of simply having
them be time vested."
Write to Jennifer Levitz at
jennifer.levitz@wsj.com1
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