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Publications
Publications
  • 2017
  • Working Paper

Does Financial Misconduct Affect the Future Compensation of Alumni Managers?

By: Boris Groysberg, Eric Lin and Georgios Serafeim
  • Format:Print
  • | Language:English
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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

Corporate Misconduct; Restatements; Stigma; Financial Misconduct; Compensation and Benefits; Crime and Corruption; Employees

Citation

Groysberg, Boris, Eric Lin, and Georgios Serafeim. "Does Financial Misconduct Affect the Future Compensation of Alumni Managers?" Working Paper, November 2017.
  • SSRN

About The Authors

Boris Groysberg

Organizational Behavior
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George Serafeim

Accounting and Management
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    Machine Learning Models for Prediction of Scope 3 Carbon Emissions

    By: George Serafeim and Gladys Velez Caicedo
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    A Conceptualization of Sub-Living Wages: Liabilities, Leverage, and Risk

    By: Drew Keller, Katie Panella and George Serafeim
    • June 2022
    • Faculty Research

    Business Implications from Regulating Carbon Emissions in the EU

    By: George Serafeim and Benjamin Maletta
More from the Authors
  • Machine Learning Models for Prediction of Scope 3 Carbon Emissions By: George Serafeim and Gladys Velez Caicedo
  • A Conceptualization of Sub-Living Wages: Liabilities, Leverage, and Risk By: Drew Keller, Katie Panella and George Serafeim
  • Business Implications from Regulating Carbon Emissions in the EU By: George Serafeim and Benjamin Maletta
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