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Free Dennis Kozlowski? Sure, why not?

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The late 1990's and first part of the millennium showed corporate governance in America at its lowest ebb. Imperial CEOs ran their companies like personal fiefdoms, and board of directors were supine, taking care of their companies about as well as Britney Spears took care of her kids. And the poster child of it all, former Tyco International Ltd. (NYSE: TYC) CEO Dennis Kozlowski, he of the $6,000 shower curtain and vodka-spitting penis of David, is in prison.

But as Dan Ackman pointed out (subscription required) in The Wall Street Journal yesterday, he may not really belong there: "Kozlowski wasn't convicted for overspending, nor for defrauding investors -- the most common charges leveled against corrupt CEOs. He was convicted instead of grand larceny, that is, of stealing his bonuses, which were certainly over-sized. But even if you believe the worst about Kozlowski and his co-defendant former Tyco CFO Mark Swartz, they were paid according to a contract, and that is not stealing."

Kozlowski appears to have been jailed as a scapegoat for an era that most of us wish hadn't happened. Kozlowski's lawyers are attempting to have the conviction overturned (subscription required) on appeal, and that looks like the right thing to do. If the board had done something even remotely close to its job, none of this would have happened. Kozlowski should not be punished for receiving a completely outrageous pay package, and behaving in the manner that CEOs were expected to behave in at the time.

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Last updated: November 25, 2009: 08:48 AM

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