Tyco Hires Finance Chief From UTC
Tyco International Ltd., its shares battered by accounting concerns, Wednesday replaced its chief financial officer in a move cheered by investors as a big step toward mending fences with Wall Street.
Tyco appointed United Technologies Corp. Chief Financial Officer David FitzPatrick, 48, to replace Mark Swartz, who had been aggressively quizzed about Tyco’s accounting during long conference calls with investors and analysts.
“Tyco is getting a highly respected CFO in FitzPatrick,” said John Boland, an analyst and fund manager at NL Capital Management.
“This is a tremendous coup.”
Tyco shares rose 12% on the New York Stock Exchange, closing up $1.90 at $17.80 after the announcement was made.
The hiring of FitzPatrick marks the second executive coup by Tyco, which in July lured Motorola President Edward Breen to become its chairman and chief executive after former CEO Dennis Kozlowski resigned in June.
FitzPatrick had served as UTC’s finance chief since 1998. Before that he held top finance posts at Eastman Kodak Co. and General Motors Corp.
UTC makes products ranging from Black Hawk helicopters to Otis elevators.
“The reputation of Mr. FitzPatrick along with that of United Technologies is the kind of reputation that Tyco is seeking,” said Paul Nisbet, an analyst at JSA Research Inc.
FitzPatrick joins a company that’s being investigated by lawyer David Boies and several government entities, including Manhattan and New Hampshire prosecutors. They are investigating whether Tyco corporate funds were used improperly to enrich senior executives and board members.
The Securities and Exchange Commission also is reviewing Tyco’s accounting.
Details from Boies’ internal investigation are expected next week.
As Tyco’s chief financial officer since 1995, Swartz was a key advisor in Kozlowski’s decade-long acquisition binge that built Tyco into one of the world’s largest conglomerates. Tyco products range from trash bags to ADT burglar alarms.
Swartz suffered from his close ties with Kozlowski, who has been indicted on charges that he avoided paying sales taxes on artwork.
Swartz ranked as the highest-paid chief financial officer in the United States last year, according to research firm Equilar Inc. He collected nearly $47 million in compensation.
Kozlowski resigned in June, just before his criminal indictment. Tyco announced last month that Swartz would leave the company as soon as a successor was found.
Before Wednesday, Bermuda-based Tyco’s stock price had plunged about 73% this year amid persistent worries about accounting and strategic problems, as well as Kozlowski’s resignation.
Investors have called for the resignation of most of Tyco’s board, which has been criticized for being lax during Kozlowski’s tenure.
Separately, United Technologies announced that FitzPatrick will be succeeded by Steve Page, 62, who served as chief finance officer for the Hartford, Conn.-based manufacturer from 1993 to 1997.
