Journal of Business Ethics

, Volume 150, Issue 3, pp 853–862 | Cite as

The Effects of Compensation Structures and Monetary Rewards on Managers’ Decisions to Blow the Whistle

  • Jacob M. RoseEmail author
  • Alisa G. Brink
  • Carolyn Strand Norman


Recent research indicates that compensation structure can be used by firms to discourage their employees from whistleblowing. We extend the ethics literature by examining how compensation structures and financial rewards work together to influence managers’ decisions to blow the whistle. Results from an experiment indicate that compensation with restricted stock, relative to stock payments that lack restrictions, can enhance the likelihood that managers will blow the whistle when large rewards are available. However, restricted stock can also threaten the effectiveness of whistleblowing systems without the presence of large financial rewards for whistleblowing. Thus, the large potential rewards for whistleblowing enacted by the Dodd–Frank Act appear timely as firms are moving toward compensation agreements that include greater proportions of restricted stock.


Stock compensation Restricted stock Rewards Whistleblowing 



The authors would like to acknowledge the helpful comments of Reza Barkhi, C. Bryan Cloyd, Mark Dibben, Eric Gooden, Thomas B. Hansen, Larry N. Killough, Anne Magro, Anna Rose, and participants at research workshops at George Mason University, University of Tasmania, Virginia Commonwealth University, and Virginia Polytechnic Institute.


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Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  • Jacob M. Rose
    • 1
    Email author
  • Alisa G. Brink
    • 2
  • Carolyn Strand Norman
    • 2
  1. 1.School of Accounting and Commercial LawVictoria University of WellingtonWellingtonNew Zealand
  2. 2.School of BusinessVirginia Commonwealth UniversityRichmondUSA

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