Alex Molinaroli’s personality is linked to two articles that reveal his pessimistic view of himself. Johnson Controls, founded in 1885 by Alex Molinaroli, is a technology and industrial company.
It develops products, services, and solutions to improve the energy and operational efficiencies of buildings, automotive batteries, electronics, and automobile interior systems. The company employs over 170,000 people worldwide and operates from 1,300 locations in over 150 countries.
The affair began with his consultant. The Ponzi scheme followed. A $28.8 billion deal involving two legendary American corporations has now been announced.
Alex Molinaroli, CEO of Johnson Controls Inc., has had a remarkable and remarkably unusual run, confirming a deal to join forces with Tyco International, a company that has known controversy on an even grander scale.
Alex Molinaroli’s affair with a consultant
Johnson Controls has fired consulting firm Lichter & Ihle over an extramarital affair between its CEO, Alex Molinaroli, and Kristin Ihle, a Principal at the firm. Molinaroli will continue to serve as the company’s CEO. Johnson Controls had been a Lichter & Ihle client for many years.
After Johnson Controls’ CEO, President, and Chairman, Alex Molinaroli, confessed his affair with Kristin Ihle, Principal at Lichter & Ihle, to his family in May, the long-standing partnership between the two firms was questioned, resulting in the consulting firm’s dismissal.
The affair of Johnson Controls CEO Alex Molinaroli with a company consultant gained attention
According to a Bloomberg report, Molinaroli informed his wife of his affair with Ihle in late May. This clearly did not sit well with his wife, Patsy Molinaroli, who is said to have sent a threatening email to Ihle on May 29.
Later that day, she allegedly fired a pistol four times in the marital home (Alex Molinaroli was not present) and then attacked some windows, a cabinet, and a Pac-Man arcade game with a baseball bat.
Of course, there is a more serious issue at work. Ihle is a principal at Lichter & Ihle, a consulting psychology firm that was working for Johnson Controls at the time the affair was revealed. The potential for a conflict of interest is obvious; after all, Molinaroli is the CEO and Lichter & Ihle was hired by Johnson Controls.
Is it likely to have an effect on EPS (Earning Per Share)?
The data suggests that the answer is “no.”
- First and foremost, Lichter & Ihle focuses on coaching and talent development. Investors should consider whether these activities are likely to affect Johnson Controls’ earnings prospects in the short term. In other words, even if Ihle had benefited from favors, it is unlikely that his prospects at the company would have been materially altered.
- Second, Lichter and Isle had been with the company for “several years,” according to Bloomberg. Although we do not know when the affair began, it appears unlikely that Molinaroli hired the consultancy because of his personal interest in Ihle.
- Third, the Johnson Controls board of directors investigated the matter and determined that Molinaroli had not acted inappropriately and that no conflicts of interest had occurred. Furthermore, following the disclosure of the affair, Johnson Controls and Lichter & Ihle parted ways, removing any potential or perceived conflict of interest.
- Fourth, despite some considerations about the negative press the company received as a result of the issue, there is little evidence that it harmed any of the company’s working relationships. Johnson Controls sells automobile batteries, and automobile interiors, as well as heating, ventilation, and air conditioning equipment. There have been no reports of car drivers refusing to modify their car batteries out of concern for the CEO’s personal life.
- Fifth, Lichter & Ihle are the biggest losers in all of this. Johnson Controls no longer employs the firm as a consultant. As a result, it’s unlikely that Johnson Controls employees will become dissatisfied because they believe Ihle is receiving an unfair advantage.
The effect of an extramarital affair on bonus loss of Monliroli’s Company
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According to a proxy statement issued by the Milwaukee-based company, the compensation committee decided to reduce Molinaroli’s annual bonus by 20%.
The step was punishment for the CEO’s extramarital affair with the principal of a consulting firm with which Johnson Controls did business, which was found to violate the company’s ethics policy by an internal review.
Molinaroli, who admitted to the affair, stands to lose around $1 million in total. The company’s executive committee hired outside counsel to help it review Molinaroli’s indiscretion. The 55-year-old CEO had an affair with Kristin Ihle, whose firm Lichter &
Ihle provides talent management and organizational planning advice to businesses.
Following the affair, Molinaroli’s wife Patsy filed for divorce in June.
Despite the bonus reduction, Molinaroli will still earn more than $19 million for the year, nearly double what he earned in 2013, owing largely to his advancement within the company.
Alex Molinaroli’s Involment in Ponzi Scandal
The board of directors of Johnson Controls stated that chief executive officer Alex Molinaroli’s involvement with a Ponzi schemer has no bearing on the company.
Molinaroli was listed in court records in West Palm Beach, Fla., as one of a large number of investors who loaned money to Joseph P. Zada of Grosse Pointe Shores, Mich.
According to a press release issued by the United States Attorney’s Office for the Southern District of Florida, Zada was found guilty in September of 15 counts of mail fraud in a $50 million Ponzi scheme that spanned ten years.
According to the court transcripts, Molinaroli has given Zada “millions of dollars” since 2006, and Zada has lived in a Michigan mansion owned by Molinaroli.
The Milwaukee Journal-Sentinel reported last week that Molinaroli’s connection to Joseph Zada, the man convicted in the Ponzi scheme on Sept. 3, was revealed in divorce papers and in records from a federal trial in Florida.
Zada was found guilty of running a 10-year scam that defrauded dozens of investors, including former NHL hockey star Sergei Fedorov.
Since then, Molinaroli has disputed or attempted to address the following connections stated by a prosecutor in court records: Zada lived rent-free in a house in Michigan owned by Molinaroli, Molinaroli funded Zada’s defense, and Molinaroli offered to pay $20 million in restitution on Zada’s behalf.
Molinaroli stated that he first met Zada in 2006 through his then-stepson, John Shealey, who also invested with Zada. According to authorities, Zada told victims that he was connected to Saudi royalty and that he could use these connections to generate massive returns on oil investments.
Following the newspaper’s report that Molinaroli was unsure how much money he had invested with Zada, the executive stated that bankruptcy documents show Zada admitted to owing him approximately $2.5 million. He stated that no funds from Johnson Controls were involved.
When Assistant U.S. Attorney Adrienne Rabinowitz argued for Zada’s detention without bond, she stated that he told authorities that Molinaroli had given him “millions of dollars” since 2006 to pay for his defense and that Molinaroli had promised to pay about $20 million in restitution in the case.
Tyco Merger Deal
Let’s talk about the merger with Tyco, the former conglomerate that was broken up into several companies after former CEO Dennis Kozlowski was forced out in 2002 and later imprisoned.
Molinaroli led the combined company as CEO for 18 months before becoming executive chairman for a year.
The company will also assume Tyco’s tax domicile in Ireland, where the corporate tax rate is 12.5 percent versus 35 percent in the United States – the latest in a series of contentious so-called tax inversions.
Despite the controversy, Molinaroli has a glamorous corporate life. While the company’s stock dropped 3.9 percent in a single day and he missed out on the $39 million cash severance that would have been his when he was the odd person out in the deal, things seem to be working out for him.
His 425,320 JCI shares can be exchanged for one share in the new company or cashed out at $34.28 per share. That’s worth $14.6 million, not including unvested equity awards worth at least $10 million and a pension worth $13.6 million that he can begin receiving once he retires.
Alex Molinaroli’s words about a Con man, Joseph Zada
Johnson Controls Inc. CEO Alex Molinaroli stated that he knew little about Joseph Zada when he entrusted him with “a substantial amount of money” funds that later vanished in a $50 million Ponzi scheme.
He mentioned the following points in one of his interviews to clarify his relationship with a con man:
- He denied offering $20 million in restitution to Zada but admitted the subject had been discussed. Molinaroli stated that Zada’s lawyer approached him and asked if he would assist in the payment of restitution. “They asked me to help, and I said only if I got restitution,” Molinaroli explained, adding that the topic was then dropped.
He claimed that Adrienne Rabinowitz, the successful prosecutor of Zada, was mistaken when she stated in court last month that Molinaroli had offered to pay the restitution.
- Molinaroli stated that the US Securities and Exchange Commission approached him about his dealings with Zada, but that he never spoke with the FBI or the US Attorney’s office about the matter.
- Molinaroli revealed that he had paid Zada’s legal fees, but he stated that the funds were given to Zada as loans. He stated that he was unsure how much money he gave to Zada. He was hoping that if he got through this, he would be able to get paid back.”
- Molinaroli confirmed that he purchased the Grosse Pointe Shores, Michigan, mansion where Zada was living after it went into bankruptcy and allowed the fraudster to live there rent-free. Molinaroli stated that he purchased the property in 2012 because it was an excellent investment.
CONCLUSION
Instead of being the subject of so many negative stories and articles about his personal and professional life, Alex Molinaroli is still the CEO of Johnson Controls Inc. Although we can clearly see from his personality that he is cunning and untrustworthy to his wife. Because he is having an extramarital affair. And, from a professional standpoint, he is presenting himself as a fraudster. And, based on the above explanations, he is attempting to prove his innocence in the Ponzi Scandal.