We identify sustainability‐focused analysts using recent advances in machine learning combined with conference call transcripts. Sustainability‐focused analysts issue more accurate earnings forecasts, and the stock market reacts more strongly to their revisions. The forecasting advantage of sustainability‐focused analysts is amplified for material sustainability issues, small firms, and growth firms. Consistent with a learning curve in understanding how sustainability issues relate to future performance, we find that less experienced analysts are less likely to focus on sustainability and that they reap fewer benefits in forecast accuracy when they do so. Our results suggest that far from being an inefficient use of time and resources, focusing on sustainability provides a competitive advantage in one of the most pivotal steps in valuation: forecasting earnings.

This study examines turnover experiences in public accounting, including the exit phase (from public accountants' initial thoughts of leaving to their exit) and the post‐exit phase (from their exit to the present moment) of the turnover process. Drawing on social exchange theory and organizational support theory, we also investigate the relationship between these phases by exploring how turnover characteristics within the exit phase impact alumni's decisions to engage in post‐employment citizenship in the post‐exit phase (e.g., recommending the firm's services to others). Using the experiential questionnaire method, we rely upon two separate surveys to investigate the turnover process from the perspective of 284 firm alumni (“leavers”) and 83 experienced public accountants (“stayers”). Our process‐based research method allows us to gather a large and rich data set that provides multiple perspectives on the turnover experience in public accounting. Our results not only provide insights into the underlying factors influencing turnover but also indicate several places in the turnover decision process where firms can strategically intervene. Finally, our results show that several turnover characteristics within the exit phase impact post‐employment citizenship behaviors in the post‐exit phase. Consequently, our results demonstrate that the characteristics that drive employees' decisions to leave the firm also play a significant role in shaping their post‐employment citizenship behaviors following their departure.

We examine the impact of Internal Revenue Service (IRS) Code Section 4960 of the Tax Cuts and Jobs Act of 2017 on nonprofit organizations (NPOs). This section imposes a 21% excise tax on nonprofit employee compensation exceeding $1 million per covered individual. As this is an exogenous shock imposing a cost on NPOs with highly paid employees, it leads us to examine whether those employees share the newly added cost via a reduction in their compensation. Using a difference‐in‐differences analysis on data from IRS Form 990 filings for nearly 40,000 nonprofit employee‐year observations from 2015 to 2010, we find that the level of compensation, on average, increases for treated executives in the post–Section 4960 period, but at a slower rate than that of the control group of executives. These results are consistent with highly paid employees being reluctant, on average, to take a pay cut, but being more willing to accept a reduction in their rate of pay growth. Our results are robust to alternative treatment specifications and control samples, such as employees who earn more than $1 million but are not covered under Section 4960 and medical professionals who are specifically exempt from Section 4960. We also find that compensation decreases are more likely for treated employees post–Section 4960 and that replacements for treated CEOs take an even steeper pay cut post–Section 4960. Additionally, we observe increased turnover for treated CEOs post–Section 4960, consistent with Section 4960 leading to conflicts between treated CEOs and their boards regarding the excise tax and who should bear its cost.