Publications
Publications
- 2016
- Academy of Management Annual Meeting Proceedings
Scandal and Stigma: Does Corporate Misconduct Affect the Future Compensation of Bystander Managers?
By: Boris Groysberg, Eric Lin and George Serafeim
Abstract
This paper explores whether a firm’s misconduct can affect the compensation of former managers who were neither at the firm at the time of misdeeds nor involved in the scandal. Results suggest that stigma may influence compensation of former managers, even in cases where such managers had left the firm prior to the corporate scandal and were not legally involved in the scandal. The decrease in compensation is more pronounced in countries with strong rule of law, for individuals who were functionally proximate to the misconduct, and for individuals in senior positions. These findings suggest that the stigma from financial misconduct may extend beyond the confines of potential legal responsibility to a broader interpretation based on association with a tarnished firm.
Keywords
Citation
Groysberg, Boris, Eric Lin, and George Serafeim. "Scandal and Stigma: Does Corporate Misconduct Affect the Future Compensation of Bystander Managers?" Academy of Management Annual Meeting Proceedings (2016).
About The Authors
