ADT 2005 Annual Report Download - page 60

During fiscal 2005, under Mr. Breen’s leadership as the Company’s Chief Executive Officer, the
Company continued to: reduce its debt and strengthen its balance sheet; realize strong cash flow
performance, which enabled it to return value to shareholders by increasing the stock dividend and
repurchasing shares and convertible bonds; sharpen its focus on operational excellence, generating
savings from Six Sigma/Lean and strategic sourcing initiatives; and invest in growth initiatives to drive
future organic revenue growth. The Company continued to make progress on the restructuring and
divestiture programs announced in early fiscal 2005, made a number of strategic bolt-on acquisitions in
its Healthcare segment, and also continued to improve its corporate governance standards and
processes and to emphasize the importance of its code of ethics. During fiscal 2005, under Mr. Breen’s
leadership and oversight, the Company achieved its goal of compliance with Section 404 of Sarbanes-
Oxley.
Fiscal 2005 was a year of continuing change and evolution for Tyco, with lower than expected
organic revenue growth. This is reflected in Mr. Breen’s fiscal 2005 bonus, which was significantly lower
than the fiscal 2004 bonus. The Committee considers Mr. Breen’s level of compensation appropriate,
and continues to value his outstanding leadership of the Company during fiscal 2005.
Certain Other Executive Officers
The remaining five Named Officers are William B. Lytton, Executive Vice President and General
Counsel, Richard Meelia, President of Tyco Healthcare Group, Juergen Gromer, President of Tyco
Electronics, Thomas Lynch, President, Tyco Engineered Products and Services and David J. FitzPatrick,
Advisor to the Chairman and Chief Executive Officer. The details of the compensation for these
individuals are described in the tables and footnotes above.
Summary
We are guided by the principle that the Company’s total compensation program must be
competitive, must support our overall strategy and objectives, and must provide significant rewards for
outstanding financial performance while establishing clear consequences for under-performance. The
Annual Incentive Plan takes into account Tyco’s overall performance, as well as segment and business
unit objectives. Annual bonus and long-term awards take into account not only objective financial goals,
but also individual performance goals and behaviors that reinforce our core values, including
accountability and the highest standards of corporate governance.
Submitted by the Compensation and Human Resources Committee:
Mackey J. McDonald, Chair
Admiral Dennis C. Blair
George W. Buckley
Rajiv L. Gupta
December 2, 2005
Compensation Committee Interlocks and Insider Participation
None of our executive officers serves as a member of the board of directors or compensation
committee of any entity that has one or more of its executive officers serving as a member of our
Compensation and Human Resources Committee. In addition, none of our executive officers serves as
a member of the compensation committee of any entity that has one or more of its executive officers
serving as a member of our Board of Directors.
42 2006 Proxy Statement