Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • Article
  • Harvard Business School Working Knowledge

Does Financial Misconduct Affect the Future Compensation of Alumni Managers?

By: Boris Groysberg, Eric Lin and George Serafeim
  • Format:Electronic
ShareBar

Abstract

We explore how an organization’s financial misconduct may affect pay for former employees not implicated in wrongdoing. Drawing on stigma theory we hypothesize that although such alumni did not participate in the financial misconduct, and they had left the organization years before the misconduct, they experience a compensation penalty. Our results support this prediction. The stigma effect increases in relation to the job function proximity to the misconduct, recency of the misconduct, and an employee’s seniority. Collectively, our results suggest that the stigma of financial misconduct could reach alumni employees and need not be confined to executives and directors that oversaw the organization during the misconduct.

Keywords

Financial Misconduct; Stigma; Finance; Crime and Corruption; Executive Compensation; Employees; Compensation and Benefits

Citation

Groysberg, Boris, Eric Lin, and George Serafeim. "Does Financial Misconduct Affect the Future Compensation of Alumni Managers?" Harvard Business School Working Knowledge (December 6, 2017).
  • Read Now

About The Authors

Boris Groysberg

Organizational Behavior
→More Publications

George Serafeim

Accounting and Management
→More Publications

More from the Authors

    • July 2022
    • Faculty Research

    David Crane’s Clean(er) Energy Strategy at NRG

    By: George Serafeim, Michael W. Toffel and Tom Quinn
    • July 2022
    • Faculty Research

    Operation Overlord

    By: Boris Groysberg, Greg Goullet, Katherine Connolly Baden and Sarah L. Abbott
    • July 2022
    • Faculty Research

    FIJI Water: Carbon Negative? (Abridged)

    By: Michael W. Toffel, George Serafeim, Francesca Gino, Stephanie Van Sice and Tom Quinn
More from the Authors
  • David Crane’s Clean(er) Energy Strategy at NRG By: George Serafeim, Michael W. Toffel and Tom Quinn
  • Operation Overlord By: Boris Groysberg, Greg Goullet, Katherine Connolly Baden and Sarah L. Abbott
  • FIJI Water: Carbon Negative? (Abridged) By: Michael W. Toffel, George Serafeim, Francesca Gino, Stephanie Van Sice and Tom Quinn
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College