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That Scandal You Had Nothing to Do With Got Its Stink on You

All you Andersen refugees that were light years away from Houston probably think that people have stopped judging you in their hearts, but you would be wrong:

The Enrons and Worldcoms and Wells Fargos hurt the careers of innocent bystanders. It's a nasty and persistent reputational ripple effect that can be incredibly hard, and sometimes impossible, to counteract.

Wells Fargo & Co., where bank employees tried to meet quotas and earn bonuses by opening sham accounts for customers without their knowledge, is the scandal of the hour. And it is executives in financial services firms that suffer the most from guilt by association, an article in the September Harvard Business Review suggests.

Initial compensation at these executives' next job is about 10 percent lower than for that their untainted counterparts, the authors found. Across industries, job functions, levels of seniority, and regions, executives with such companies on their résumés took a cut of 4 percent in total compensation. Women were dinged 7 percent to men's 3 percent.

One expert suggests "addressing it head-on, both to headhunters and to anybody they’re meeting in an interview context," so don't be shy about opening with, "Hi, I'm Larry and I didn't have anything to do with those idiots."

[Bloomberg, HBR]