Tyco International (Scandal)

Tyco's 2002 crisis demonstrates how executive extraction can hollow out even diversified conglomerates. CEO Dennis Kozlowski treated the company as personal wealth machine—$400 million in unauthorized compensation, $6,000 shower curtains, $2 million birthday party for wife. Like termites consuming a house's structure while the paint looks fine, Tyco's value was systematically extracted while external appearance remained intact. The company survived but only after complete leadership replacement.