Dennis Kozlowski, Tyco International
A year ago, it looked as if Tyco International Ltd.'s (TYC) chairman and CEO, L. Dennis Kozlowski, was on the ropes. An analyst had alleged that Tyco had hyped its results, leading the Securities & Exchange Commission to launch an inquiry. By December, 1999, the controversy had nearly halved the price of Tyco's once-highflying stock and was threatening to derail one of Corporate America's most aggressive dealmakers.
But in 2000, Kozlowski came charging back. In July the SEC, in effect, gave the company a clean bill of health by ending its inquiry. And since then, Kozlowski has kicked his dealmaking machine back into full throttle, snapping up some 40 companies in 2000 for a total of $9 billion, while profits have soared. Even though Tyco is trading some 12% off its record high, it still has a market cap of about $93 billion--more than General Motors (GM), Ford (F), and Sears (S) combined.
Tyco is a classic conglomerate, making everything from fire alarms and valves to health-care products and electronic components. Kozlowski, 54, a 23-year company veteran who took over as CEO in 1992, is free to focus on dealmaking because he gives his managers enormous autonomy. At the same time, he enforces accountability by setting tough goals. That's how he gets away with just a skeletal head office staff in Exeter, N.H., to oversee 215,000 employees. He prefers managers who are "smart, poor, and want to be rich," he says. That's the way he was, growing up in a working-class neighborhood in Newark, N.J., before attending the local Catholic university, Seton Hall.
One of Kozlowski's finest moments involved an underseas fiber-optic cable business he bought from AT&T for $850 million in 1997. Last July, Tyco raised $2.1 billion by floating just 14% of this since-expanded business, now known as TyCom Ltd., effectively valuing it at more than 14 times what he had paid. This Midas touch in deal after deal has transformed Tyco from an obscure manufacturer into a powerhouse worth 50 times more than when Kozlowski took charge eight years ago. It's an achievement that has led some to compare Kozlowski with General Electric Co.'s (GE) Jack Welch. But unlike Welch, Kozlowski shows no signs of slowing down anytime soon.