Corporate Scandals Dog Execs Into Next Job, Even If They Had Nothing To Do With It

By:
Chris Gaetano
Published Date:
Sep 13, 2016
Hand Of God

Wells Fargo is still reeling from recent revelations that it had created millions of sham accounts in order to meet sales goals, resulting in account holders being charged with fees for credit cards, debit cards and bank accounts they didn't know they had. The news resulted in the firing of 5,300 workers, who CFO John Shrewsberry said were under-performers who were worried about keeping their jobs, though conceded that some were branch managers or more senior staffers.

But while these 5,300 workers are now looking for new jobs, no doubt are others within Wells Fargo that are also looking to change companies as part of the general staff turnover that all organizations, especially large ones, face in the day to day of business. What happens to those workers whose only link to the scandal was that they happened to work at the same company where it happened?

Recent research has shown that the sins of their previous employer tend to follow them into their new ones, with initial executive compensation being 10 percent less than peers who moved from less scandal-ridden companies, according to Bloomberg. The total compensation penalty, said Bloomberg, was 4 percent on average (men took a 3 percent cut when coming from a scandalous company, women took a 7 percent cut). The reason for this is that even if a company likes you and understands you had nothing to do with the scandal, your previous experience is a black mark on your resume, and so the new company feels you're lucky to be hired at all. 

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