When Edward D. Breen took the helm of Tyco International Ltd. (TYC) in the summer of 2002, many people thought the disgraced conglomerate was headed for bankruptcy, just like Enron Corp. In 2004, Breen proved them dead wrong. Under his leadership, Tyco has more than survived the scandalous conduct of former Chief Executive Dennis Kozlowski -- who in early 2005 will be retried on charges that he looted the company. Indeed, Tyco now has a bright future.
Breen, who came to Tyco from Motorola Inc. (MOT), where he was president, moved aggressively to clear the biggest clouds looming over the $40 billion company. He slashed debt to $16.7 billion, from a peak of $28 billion, regaining an investment-grade rating. He ordered a review of Kozlowski's accounting, then rebuilt the audit staff. And he worked to make Tyco a model of corporate governance, starting by replacing the entire board and virtually all senior executives.
Now Breen is focused on generating growth. Sales surged 12%, to $40.2 billion, in the fiscal year ended Sept. 30, and net income tripled to $2.9 billion, thanks in part to a restructuring that improved margins. Breen still has some big challenges, including shareholder lawsuits. But investors are clearly betting on him. The stock has doubled since the end of 2002, giving Tyco a market value of $73 billion. That's not as high as the $120 billion peak reached under Kozlowski. But it's far above what anyone thought possible when Breen arrived.