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CPA-AGRC Distinguished Speaker Series and TRSS - Shiva Rajgopal Wealthier

Sharing the Pain between Workers and Management: Evidence from the COVID-19 Pandemic and 9/11 Attacks

Date & Time

April 6, 2022


Link provided in reminder email the day before the event


Kathy Cunningham

In conjunction with the Telfer Research Seminar Series

***M.Sc. Students, this event can count towards one of the six mandatory Research Seminars Series needed to attend (MHS6991 or MGT6991).***

Shiva Rajgopal, PhD

We examine the rhetoric in ESG literature that managers “share the pain” of employees who are laid off or whose benefits are cut by committing to reduce CEO pay or by enacting other positive worker friendly actions during the Covid crisis. Using the exogenous shock of the COVID pandemic and a unique database, we examine more than 4,062 positive and negative actions targeted at workers taken by the S&P 1500 firms in 2020 in response to the pandemic. Our findings indicate that economic considerations such as exposure to the pandemic and poor stock performance prior to the pandemic are the primary determinants of management’s decision to share the pain of employees. Stakeholder concerns, proxied by higher employee-related corporate social responsibility scores, lower pay disparity between the CEO and the median employee, or a signatory to the Business Roundtable Statement, are not associated with managers’ sharing of the pain. Evidence of such pain sharing from another unexpected crisis from the past –the September 11, 2001, terrorist attacks – is remarkably similar. Sharing the pain is not associated with future stock returns performance. Finally, we show that the median CEO’s wealth increased nearly 18-fold relative to the CEO pay cut for firms that enforced CEO pay cuts and laid off employees during the Covid crisis. The paper adds to growing evidence that U.S. firms do not appear to “walk the talk” of concerns for stakeholders.

About the Speaker

Shiva Rajgopal is the Kester and Byrnes Professor of Accounting and Auditing at Columbia Business School.  He served Shiva Rajgopal as the Vice Dean for Research at the Columbia Business School (CBS) from 2017-2019.  His research covers financial reporting issues, earnings quality, fraud, executive compensation, corporate culture, corporate governance and ESG issues.

He is a three-time recipient of the prestigious American Accounting Association (AAA) Notable Contribution to the Literature Award.  He is among the most prolific researchers on financial reporting issues ever.  He has served on the editorial boards of several international academic journals and is invited to present his research at virtually every major academic institution in the world.

He is passionate about bridging academic theory with policy setting and corporate practice.  He regularly writes op-eds for Forbes and the Harvard Business Review.  He is a two-time awardee of the Graham and Dodd Scroll Prize given by the Financial Analysts Journal, and a three-time winner of the Glen McLaughlin Award for Research in Accounting Ethics. His work is frequently cited in the popular press, including The Wall Street Journal, The New York Times, Bloomberg, Fortune, Forbes, Financial Times, Business Week, and the Economist.

He has advised asset management firms, think tanks, advisory firms and professional and trade associations. He is an Indian American who resides in New York City.  He enjoys cricket, travel and movies in his spare time.

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