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Paul M. Healy
James R. Williston Professor of Business Administration
Unit: Accounting and Management
Paul Healy is the James R. Williston Professor and Senior Associate Dean for Faculty Development at the Harvard Business School. His research covers a broad range of topics, including financial analysis, Wall Street research, corruption, governance, mergers and acquisitions, and business ethics. He joined the HBS faculty in 1998, after fourteen years on the faculty at the M.I.T. Sloan School of Management, where he received awards for teaching excellence in 1991, 1992, and 1997. He received accounting and finance degrees from Victoria University in New Zealand (1976 and 1977) and a Ph.D. from the University of Rochester (1981). He has published widely in the leading academic and practitioner journals, has received numerous research rewards, and is the co-author of one of the leading financial analysis textbooks. He has taught MBA and executive courses on accounting, financial analysis, corporate boards, and ethical leadership.
Wall Street Research
Wall Street Research: Past, Present, and Future provides a timely account of the dramatic evolution of Wall Street research, examining its rise, fall, and reemergence. Despite regulatory, technological, and global forces that have transformed equity research in the last ten years, the industry has proven to be remarkably resilient and consistent. Boris Groysberg and Paul M. Healy get to the heart of Wall Street research—the analysts engaged in the process—and demonstrate how the analysts' roles have evolved, what drives their performance today, and how they stack up against their buy-side counterparts. The book unpacks key trends and describes how different firms have coped with shifting pressures. It concludes with an assessment of where equity research is headed in emerging markets, drawing conclusions about this often overlooked corner of Wall Street and the industry's future challenges.
When the Crowd Fights Corruption
Corruption is the greatest impediment to conducting business in Russia, according to leaders recently surveyed by the World Economic Forum. Indeed, it's a problem in many emerging markets. The paper on which this article is based argues that businesses have a role to play in combatting it.
The paper focuses on RosPil--an anticorruption entity in Russia set up by Alexey Navalny, a crusader against public and private malfeasance in that country. As of December 2011, RosPil claimed to have prevented the granting of dubious contracts worth US $1 billion. The organization holds corrupt politicians' and bureaucrats' feet to the fire largely through Internet-based crowd-sourcing, whereby people (often anonymous) identify requests for government issued tenders that are designed to generate kickbacks.
Should entities like RosPil be supported? Should companies fashion their own responses to corruption? On the one hand, there are obvious public-relations and political risks; on the other hand, corruption can erode a firm's competitiveness, the trust of customers and employees, and even the very legitimacy of capitalism.
We argue that heads of many multinational companies are well positioned to combat corruption in emerging markets. Those leaders have the power to enforce politicies in their organizations and networks, and they enjoy the ability to organize others in the industray against this pernicious threat.
Business Analysis and Valuation: Using Financial Statements, Text and Cases
This book provides a framework for business analysis that can be used in a variety of contexts.
The four analysis steps include:
Strategy analysis: Identifying a firm's strategy and understanding any sources of competitive advantage;
Accounting analysis: Assessing how a firm's financial statements reflect its economics, and determining whether any adjustments are needed;
Financial analysis: Evaluating a firm's performance using ratios and cash flow data; and
Prospective analysis: Forecasting future performance and estimating value.
These steps are then applied to a variety of business contexts, including securities analysis, credit analysis, merger & acquisition decisions, and governance.
The Stock Selection and Performance of Buy-Side Analysts (forthcoming)
Regulators and academics have emphasized the conflicts of interest faced by Wall Street (sell-side) analysts. In contrast, analysts who work for investment firms, known as buy-side analysts, do not face these conflicts and, as a result, presumably make superior investment recommendations. this research focuses on buy- and sell-side analysts' decisions on which stocks to recommend, and the performance of those recommendations. It shows that, in contrast to popular perceptions, Wall Street analysts' recommendations, although more optimistic, are more profitable than those for buy-side peers. This performance difference reflects buy-side analysts' incentives to recommend only large liquid stocks.
Causes and Consequences of Firm Disclosures of Anticorruption Efforts
Multinationals frequently operate in locations where laws against corruption are not widely enforced. We examine ratings of self-reported anticorruption efforts for 480 multinationals to better understand what factors underlie their efforts and their performance consequences. Not surprisingly, country and industry corruption risks, as well as regulatory enforcement and monitoring, are important drivers of firms' anti-corruption efforts. Performance tests suggest that firms' decisions on how to manage corruption risk are as much ethical as economic.
Co-authored by George Serafeim
Fighting Corruption at Siemens
On November 15, 2006, German prosecutors raided offices and homes of Siemens AG staff as part of an ongoing investigation into bribery. The subsequent investigations covered business representing 60% of Siemens' revenues and spanned operations in Asia, Africa, Europe, the Middle East, and the Americas. Through interviews with key Siemens executives and supporting internal materials, this multimedia case takes a look at how one of the world's largest companies faced corruption head-on.
Article | Harvard Business Review
Paul M. Healy and Karthik Ramanna
Corruption is the greatest impediment to conducting business in Russia, according to leaders recently surveyed by the World Economic Forum. Indeed, it's a problem in many emerging markets, and businesses have a role to play in combating it, according to Healy and Ramanna. The authors focus on RosPil—an anticorruption entity in Russia set up by Alexey Navalny, a crusader against public and private malfeasance in that country. As of December 2011, RosPil claimed to have prevented the granting of dubious contracts worth US$1.3 billion. The organization holds corrupt politicians' and bureaucrats' feet to the fire largely through internet-based crowdsourcing, whereby often-anonymous people identify requests for government-issued tenders that are designed to generate kickbacks. Should entities like RosPil be supported, and should companies fashion their own responses to corruption? On the one hand, there are obvious public-relations and political risks; on the other hand, corruption can erode a firm's competitiveness, the trust of customers and employees, and even the very legitimacy of capitalism. The authors argue that heads of many multinational companies are well positioned to combat corruption in emerging markets. Those leaders have the power to enforce policies in their organizations and networks, and they enjoy the ability to organize others in the industry against this pernicious threat.
Keywords: corruption; emerging economies; entrepreneurship; globalization; Crime and Corruption; Entrepreneurship; Ethics; Globalization; Russia; Georgia (nation, Asia); India;
Healy, Paul M., and Karthik Ramanna. "When the Crowd Fights Corruption." Harvard Business Review 91, nos. 1/2 (January–February 2013). View Details
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Book | 2013
Krishna G. Palepu and Paul M. Healy
This book provides a framework for business analysis and has been used by business schools throughout the world. It provides a foundation for analysis using four key steps: 1) Strategy analysis: Identifying a firm's strategy and understanding sources of its competitive advantage; 2) Accounting analysis: Assessing how a firm's financial statements reflect its economics and determining whether any adjustments are needed. This new edition (5th ed) specifically covers measurement questions for firms reporting under US GAAP and International Standards; 3) Financial analysis: Evaluating a firm's performance using ratios and cash flow data; and 4) Forecasting future performance and estimating its value. These steps are applied to a variety of business contexts, including securities analysis, credit analysis, merger & acquisition decisions, and governance. The book includes a broad range of classic and new HBS cases to illustrate the concepts and applications.
Keywords: Governance; Debt Securities; Valuation; Performance Evaluation; Financial Statements; Credit; Business Ventures; Strategy; Financial Condition; Mergers and Acquisitions; Forecasting and Prediction;
Palepu, Krishna G., and Paul M. Healy. Business Analysis and Valuation: Using Financial Statements, Text and Cases. 5th ed. Cengage Learning, 2013. View Details
Wall Street Research: Past, Present, and Future
Boris Groysberg and Paul M. Healy
Wall Street equity analysts provide research products and services on publicly-traded companies to institutional and retail investors to help them make more profitable investment decisions. During the last ten years Wall Street research has been battered by a series of shocks. As concerns over conflicts of interest mounted, the integrity of research output was questioned, leading to transformative regulatory changes. New technologies emerged to democratize information and change the way that stocks are traded, threatening the industry's product and business model. There were upheavals and stagnation in established core financial markets such as the U.S., Japan and Western Europe. And burgeoning new markets in countries such as China and India raised potential challenges to the dominance of leading firms. Our research tells a fascinating story of an industry that has proved remarkably resilient in resolving economic and regulatory challenges. It provides practitioners and scholars with a deeper understanding of the forces that have shaped the industry and accounted for its resilience, and how these are likely to influence its future.
Keywords: financial analysts; investment banks; conflicts of interest; Accounting; Financial Institutions; Financial Services Industry; United States;
Groysberg, Boris, and Paul M. Healy. Wall Street Research: Past, Present, and Future. Palo Alto, CA: Stanford University Press, 2013. View Details
Text Book | 2007
Business Analysis and Valuation: Using Financial Statements
Paul M. Healy and Krishna G. Palepu
Financial statements are the basis for a wide range of business analysis. Managers, securities analysts, bankers, and consultants all use them to make business decisions. There is strong demand among business students for course materials that provide a framework for using financial statement data in a variety of business analysis and valuation contexts. The fourth edition of Business Analysis and Valuation: Using Financial Statements allows you to undertake financial statement analysis using a four-part framework—(1) business strategy analysis for developing an understanding of a firm's competitive strategy; (2) accounting analysis for representing the firm's business economics and strategy in its financial statements and for developing adjusted accounting measures of performance; (3) financial analysis for ratio analysis and cash flow measures of operating; and (4) prospective analysis. Then, you'll learn how to apply these tools in a variety of decision contexts, including securities analysis, credit analysis, corporate financing policies analysis, mergers and acquisitions analysis, and governance and communication analysis.
Keywords: Valuation; Framework; Decision Choices and Conditions; Financial Statements;
Healy, Paul M., and Krishna G. Palepu. Business Analysis and Valuation: Using Financial Statements. 4th ed. Mason, OH: Thomson South-Western, 2007. View Details
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Casebook | 2003
Business Analysis and Valuation Using Financial Statements: Text and Cases
Krishna G. Palepu, Paul M. Healy and Victor L. Bernard
Keywords: Theory; Valuation; Finance; Reports; Cases; Information;
Palepu, Krishna G., Paul M. Healy, and Victor L. Bernard. Business Analysis and Valuation Using Financial Statements: Text and Cases. 3rd ed. Mason, OH: Thomson South-Western, 2003. View Details
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Reading Financial Reports
William J. Bruns, Paul M. Healy, J. H. Hertenstein, Robert S. Kaplan and Sharon M. McKinnon
Keywords: Finance; Reports;
Bruns, William J., Paul M. Healy, J. H. Hertenstein, Robert S. Kaplan, and Sharon M. McKinnon. Reading Financial Reports. 2nd ed. Business Fundamentals . Boston: Harvard Business School Press, 2002. View Details
Business Analysis and Valuation
Paul M. Healy, Krishna G. Palepu and Victor L. Bernard
Keywords: Valuation; Theory;
Healy, Paul M., Krishna G. Palepu, and Victor L. Bernard. Business Analysis and Valuation. 2nd ed. South-Western College Publishing, 2000. View Details
Business Analysis and Valuation Using Financial Statements
Victor L Bernard, Paul M. Healy and Krishna G. Palepu
Keywords: Financial Statements; Valuation;
Bernard, Victor L., Paul M. Healy, and Krishna G. Palepu. Business Analysis and Valuation Using Financial Statements. Cincinnati, OH: South-Western College Publishing, 1996. View Details
Article | Accounting Horizons | Forthcoming
Voluntary, Self-Regulatory, and Mandatory Disclosure of Oil and Gas Company Payments to Foreign Governments
Paul M. Healy and George Serafeim
Concerns about high rates of government corruption in resource-rich countries have led transparency advocates to urge oil and gas firms to disclose payments to host governments for natural resources. Transparency, they argue, can increase government accountability and mitigate corruption. However, we find a low frequency of voluntary disclosures of payments by oil and gas firms and negative stock price reactions for affected firms at the announcement of regulations mandating disclosure. This suggests that sample firm managers and their investors perceive that such disclosures generate private costs, despite any public benefits. We document that industry self-regulation has generated information to substitute for the gap in voluntary company disclosure and that such disclosures are accompanied by lower country corruption ratings. This suggests that collective action could be an effective way for companies to manage the private costs of disclosure and respond to public pressure for transparency that could provide public benefits.
Keywords: oil & gas; corruption; transparency; self-regulation; industry self-regulation; regulation; disclosure; disclosure regulation; Energy Sources; Crime and Corruption; Corporate Disclosure; Governing Rules, Regulations, and Reforms; Energy Industry;
Healy, Paul M., and George Serafeim. "Voluntary, Self-Regulatory, and Mandatory Disclosure of Oil and Gas Company Payments to Foreign Governments." Accounting Horizons (forthcoming). View Details
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How to Scandal-Proof Your Company
Despite efforts to crack down on illegal activity, crimes like fraud, bribery, embezzlement, and money laundering are rampant in corporations. What steps can leaders take to fix this growing problem?
Keywords: Organizations; Crime and Corruption; Organizational Culture; Leadership; Ethics;
Healy, Paul M., and George Serafeim. "How to Scandal-Proof Your Company." Harvard Business Review 97, no. 4 (July–August 2019): 42–50. View Details
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Article | Accounting Review
An Analysis of Firms' Self-reported Anticorruption Efforts
We use Transparency International's ratings of self-reported anticorruption efforts for 480 corporations to analyze factors underlying the ratings. Our tests examine whether these forms of disclosure reflect firms' real efforts to combat corruption or are cheap talk. We find that the ratings are related to enforcement and monitoring, country and industry corruption risk, and governance variables. Specifically, firms with high anticorruption ratings are domiciled in countries with low corruption risk ratings and strong anticorruption enforcement, operate in high corruption risk industries, have recently faced a corruption enforcement action, employ a Big Four audit firm, and have a higher percentage of independent directors. Controlling for these effects and other ratings determinants, we find that firms with lower residual ratings have higher subsequent citations in corruption news events. They also report higher future sales growth and show a negative relation between profitability change and sales growth in high corruption geographic segments, but not in low corruption segments. The net effect on valuation from sales growth and changes in profitability is close to zero. The findings are robust to a number of sensitivity tests, including analysis of a narrower set of self-reported anticorruption efforts for a larger sample over multiple years. Given this evidence, we conclude that, on average, firms' self-reported anticorruption efforts signal real efforts to combat corruption and are not merely cheap talk.
Keywords: corruption; Performance; Corporate performance; Growth; Sales; disclosure; disclosure strategy; sustainability; Crime and Corruption; Corporate Disclosure; Performance; Sales;
Healy, Paul M., and George Serafeim. "An Analysis of Firms' Self-reported Anticorruption Efforts." Accounting Review 91, no. 2 (March 2016): 489–511. View Details
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Article | Journal of Applied Finance
This article discusses a research program investigating the workings of both the sell and buy sides of financial analysis, tackles how the U.S. securities industry research adds value in financial markets, and evaluates the business model problems that the industry encounters and how the model has been impacted by regulatory changes.
Keywords: Financial Markets; Business Model; Research; Financial Services Industry; United States;
Healy, Paul M. "Wall Street Research." Journal of Applied Finance 24, no. 2 (2014): 6–16. View Details
Article | Review of Accounting Studies
Market Competition, Earnings Management, and Persistence in Accounting Profitability Around the World
Paul M. Healy, George Serafeim, Suraj Srinivasan and Gwen Yu
We examine how cross-country differences in product, capital, and labor market competition, and earnings management affect mean reversion in accounting return on assets. Using a sample of 48,465 unique firms from 49 countries, we find that accounting returns mean revert faster in countries where there is more product and capital market competition, as predicted by economic theory. Country differences in labor market competition and earnings management are also related to mean reversion in accounting returns—but the relation varies with firm performance. Country labor competition increases mean reversion when unexpected returns are positive, but dampens it when unexpected returns are negative. Accounting returns in countries with higher earnings management mean revert more slowly for profitable firms and more rapidly for loss firms. Thus, earnings management incentives to slow or speed up mean reversion in accounting returns are accentuated in countries where there is a high propensity for earnings management. Overall, these findings suggest that country factors explain mean reversion in accounting returns and are therefore relevant for firm valuation.
Keywords: Performance; Corporate performance; valuation; Equity Valuation; Persistence; competitive advantage; institutions; earnings management; labor market; capital markets; competition; Profit; Performance; Supply and Industry; Financial Statements; Government and Politics; Globalized Markets and Industries;
Healy, Paul M., George Serafeim, Suraj Srinivasan, and Gwen Yu. "Market Competition, Earnings Management, and Persistence in Accounting Profitability Around the World." Review of Accounting Studies 19, no. 4 (December 2014): 1281–1308. View Details
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Article | Management Science
The Stock Selection and Performance of Buy-Side Analysts
Boris Groysberg, Paul Healy, George Serafeim and Devin Shanthikumar
Prior research on equity analysts focuses almost exclusively on those employed by sell-side investment banks and brokerage houses. Yet investment firms undertake their own buy-side research and their analysts face different stock selection and recommendation incentives than their sell-side peers. We examine the selection and performance of stocks recommended by analysts at a large investment firm relative to those of sell-side analysts from mid-1997 to 2004. We find that the buy-side firm's analysts issue less optimistic recommendations for stocks with larger market capitalizations and lower return volatility than their sell-side peers, consistent with their facing fewer conflicts of interest and having a preference for liquid stocks. Tests with no controls for these effects indicate that annualized buy-side Strong Buy/Buy recommendations underperform those for sell-side peers by 5.9% using market-adjusted returns and by 3.8% using four-factor model abnormal returns. However, these findings are driven by differences in the stocks recommended and their market capitalization. After controlling for these selection effects, we find no difference in the performance of the buy- and sell-side analysts' Strong Buy/Buy recommendations.
Keywords: buy-side analysts; sell-side analysts; stock recommendations; recommendation optimism; recommendation performance; investment recommendations; conflicts of interest; Financial Markets; Financial Institutions; Financial Services Industry; United States;
Groysberg, Boris, Paul Healy, George Serafeim, and Devin Shanthikumar. "The Stock Selection and Performance of Buy-Side Analysts." Management Science 59, no. 5 (May 2013): 1062–1075. View Details
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What Makes Analysts Say 'Buy'?
Boris Groysberg, Paul M. Healy, Nitin Nohria and George Serafeim
Groysberg, Boris, Paul M. Healy, Nitin Nohria, and George Serafeim. "What Makes Analysts Say 'Buy'?" Harvard Business Review 90, no. 11 (November 2012). View Details
Article | Financial Analysts Journal
What Factors Drive Analyst Forecasts?
Boris Groysberg, Paul Healy, Nitin Nohria and George Serafeim
A firm's competitive environment, its strategic choices, and its internal capabilities are considered important determinants of its future performance. Yet there is little evidence on whether analysts' forecasts of firm performance actually reflect any of these factors and which are considered most important. We use survey data from 967 analysts ranking 837 companies to judge how their forecasts are related to evaluations of firms' industry competitiveness, strategic choices, and internal capabilities. Forecasts are generally associated with many of the factors that money managers rate as important in their assessments of analyst contributions, including industry growth and competitiveness, low-price strategy, strategy execution, top management quality, innovation, and performance-driven culture. We also find wide variation across variables for ratings consistency among analysts covering the same firm. On average, consistency is higher for sell-side than buy-side analysts, consistent with sell-side analysts facing greater incentives to herd.
Keywords: Competition; Forecasting and Prediction; Industry Growth; Judgments; Performance; Valuation; Price; Quality; Innovation and Invention; Organizational Culture; Competency and Skills; Surveys;
Groysberg, Boris, Paul Healy, Nitin Nohria, and George Serafeim. "What Factors Drive Analyst Forecasts?" Financial Analysts Journal 67, no. 4 (July–August 2011). View Details
Article | Journal of Accounting Research
What Drives Sell-Side Analyst Compensation at High-Status Investment Banks?
Boris Groysberg, Paul M. Healy and David A. Maber
We use proprietary data from a major investment bank to investigate factors associated with analysts' annual compensation. We find compensation to be positively related to "All-Star" recognition, investment-banking contributions, the size of analysts' portfolios, and whether an analyst is identified as a top stock picker by The Wall Street Journal. We find no evidence that compensation is related to earnings forecast accuracy. But consistent with prior studies, we find analyst turnover to be related to forecast accuracy, suggesting that analyst forecasting incentives are primarily termination based. Additional analyses indicate that "All-Star" recognition proxies for buy-side client votes on analyst research quality used to allocate commissions across banks and analysts. Taken as a whole, our evidence is consistent with analyst compensation being designed to reward actions that increase brokerage and investment-banking revenues. To assess the generality of our findings, we test the same relations using compensation data from a second high-status bank and obtain similar results.
Keywords: Investment Banking; Research; Compensation and Benefits; Investment Portfolio; Forecasting and Prediction; Resource Allocation; Status and Position; Business Earnings; Quality; Revenue; Stocks; Voting;
Groysberg, Boris, Paul M. Healy, and David A. Maber. "What Drives Sell-Side Analyst Compensation at High-Status Investment Banks?" Journal of Accounting Research 49, no. 4 (September 2011): 969–1000. View Details
Journal Article | Journal of Financial Transformation
Can Research Committees Add Value for Investors? An Analysis of Lehman Brothers' Ten Uncommon Values® Recommendations
Boris Groysberg, Paul M. Healy and Yang Gui
Since 1949 Lehman Brothers has used an investment committee to select the top ten recommendations made by its analysts each year. We examine the performance of this committee's recommendations and find that on average its selections generated abnormal returns of 2.7% at the recommendation announcement and 4.5% for the remainder of the year. This performance cannot be explained by changes in analyst recommendations and/or target prices that accompany the committee report. Nor was it due to analyst screening ability since the returns were higher than those that earned from investing in analysts' top stock picks that were not selected by the committee. Finally, we find that abnormal announcement returns and trading volume at the report publication are correlated with market-adjusted returns for the prior year's stock selections, suggesting that investors believe that a successful process in one year is likely to be repeated the following year. We believe that these findings are particularly interesting given recent efforts to require firms to use research recommendation committees to improve the quality of research.
Keywords: Forecasting and Prediction; Stocks; Financial Markets; Investment; Investment Return; Governing Rules, Regulations, and Reforms; Performance Expectations; Groups and Teams; Research; Value Creation;
Groysberg, Boris, Paul M. Healy, and Yang Gui. "Can Research Committees Add Value for Investors? An Analysis of Lehman Brothers' Ten Uncommon Values® Recommendations." Journal of Financial Transformation 24 (November 2008): 123–130. View Details
Buy-Side vs. Sell-Side Analysts' Earnings Forecasts
Boris Groysberg, Paul M. Healy and Craig James Chapman
We compare the earnings forecast performance of analysts at a large buy-side firm to that of sell-side analysts. Our tests show that the buy-side firm analysts make more optimistic and less accurate forecasts than their counterparts on the sell-side. These performance differences appear to be partially explained by the buy-side's higher retention of poor-performing analysts and by differences in performance benchmarks used to evaluate buy- and sell-side analysts.
Keywords: Motivation and Incentives; Business Earnings; Forecasting and Prediction; Performance Effectiveness;
Groysberg, Boris, Paul M. Healy, and Craig James Chapman. "Buy-Side vs. Sell-Side Analysts' Earnings Forecasts." Financial Analysts Journal 64, no. 4 (July–August 2008): 25 – 39. View Details
Article | Journal of Accounting & Economics
Which Types of Analyst Firms Are More Optimistic?
Amanda Paige Cowen, Boris Groysberg and Paul Healy
Keywords: Business Ventures;
Cowen, Amanda Paige, Boris Groysberg, and Paul Healy. "Which Types of Analyst Firms Are More Optimistic?" Journal of Accounting & Economics 41, nos. 1-2 (April 2006): 119–146. (
Winner of Emerald Management Reviews. Citation of Excellence
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How the Quest for Efficiency Corroded the Market
Keywords: Performance Efficiency; Markets;
Healy, Paul M., and Krishna G. Palepu. "How the Quest for Efficiency Corroded the Market." Harvard Business Review 81, no. 7 (July 2003). View Details
Article | Journal of Economic Perspectives
The Fall of Enron
Keywords: Crime and Corruption;
Healy, Paul M., and Krishna G. Palepu. "The Fall of Enron." Journal of Economic Perspectives 17, no. 2 (Spring 2003). View Details
Article | Financial Times
Audit the audit committees: VIEWPOINT PAUL HEALY AND KRISHNA PALEPU: After Enron, boards must change the focus and provide greater financial transparency
P. M. Healy
Keywords: Corporate Disclosure; Accounting Audits;
Healy, P. M. "Audit the audit committees: VIEWPOINT PAUL HEALY AND KRISHNA PALEPU: After Enron, boards must change the focus and provide greater financial transparency." Financial Times (June 10, 2002), 14. View Details
R&D Accounting and the Tradeoff between Relevance and Objectivity
Keywords: Research and Development; Accounting;
Healy, P. M. "R&D Accounting and the Tradeoff between Relevance and Objectivity." Journal of Accounting Research 40, no. 3 (June 2002): 677, 34 pgs. View Details
Analyst Specialization and Conglomerate Stock Breakups
Stuart C. Gilson, Paul M. Healy, Christopher F. Noe and Krishna G. Palepu
Keywords: Stocks;
Gilson, Stuart C., Paul M. Healy, Christopher F. Noe, and Krishna G. Palepu. "Analyst Specialization and Conglomerate Stock Breakups." Journal of Accounting Research 39, no. 3 (December 2001). View Details
Information Asymmetry, Corporate Disclosure, and the Capital Markets: A Review of the Empirical Disclosure Literature
Keywords: Information; Markets; Corporate Disclosure; Capital;
Healy, Paul M., and Krishna G. Palepu. "Information Asymmetry, Corporate Disclosure, and the Capital Markets: A Review of the Empirical Disclosure Literature." Journal of Accounting & Economics 31, nos. 1-3 (September 2001): 405–440. View Details
Article | Accounting Horizons
A Review of the Earnings Management Literature and its Implications for Standard Setting
Paul M. Healy and James Wahlen
Keywords: Money; Management;
Healy, Paul M., and James Wahlen. "A Review of the Earnings Management Literature and its Implications for Standard Setting." Accounting Horizons (December 1999). View Details
Article | Contemporary Accounting Research
Stock Performance and Intermediation Changes Surrounding Sustained Increases in Disclosure
Paul M. Healy, Amy P. Hutton and Krishna G. Palepu
Keywords: Stocks; Performance; Change;
Healy, Paul M., Amy P. Hutton, and Krishna G. Palepu. "Stock Performance and Intermediation Changes Surrounding Sustained Increases in Disclosure." Contemporary Accounting Research 16, no. 3 (fall 1999). View Details
Discussion of Earnings-based Bonus Plans and Earnings Management by Business Unit Managers
Keywords: Management; Compensation and Benefits; Earnings Management;
Healy, Paul M. "Discussion of Earnings-based Bonus Plans and Earnings Management by Business Unit Managers." Journal of Accounting & Economics 26, nos. 1-3 (January 1999). View Details
Article | Journal of Corporate Finance
The Performance of International Joint Ventures: A Study of The Merchant Banking Industry In Singapore
Paul M. Healy, Andrew Alford and Ng Kah Hwa
Keywords: Performance; Joint Ventures; Banks and Banking; Banking Industry; Singapore;
Healy, Paul M., Andrew Alford, and Ng Kah Hwa. "The Performance of International Joint Ventures: A Study of The Merchant Banking Industry In Singapore." Journal of Corporate Finance 4, no. 1 (March 1998). View Details
Article | MIT Sloan Management Review
Which Takeovers are Profitable: Strategic or Financial?
Paul M. Healy, Krishna G. Palepu and Richard S. Ruback
Keywords: Integration; Profit; Strategy; Finance;
Healy, Paul M., Krishna G. Palepu, and Richard S. Ruback. "Which Takeovers are Profitable: Strategic or Financial?" MIT Sloan Management Review 38, no. 4 (summer 1997): 45–57. View Details
Article | Journal of Applied Corporate Finance
Using Capital Structure to Communicate with Investors: The Case of CUC International
Keywords: Capital Structure; Communication; Investment;
Healy, Paul M., and Krishna G. Palepu. "Using Capital Structure to Communicate with Investors: The Case of CUC International." Journal of Applied Corporate Finance 8, no. 4 (winter 1996). View Details
Discussion of a Market-Based Evaluation of Discretionary Accrual Models
Keywords: Markets; Finance;
Healy, Paul M. "Discussion of a Market-Based Evaluation of Discretionary Accrual Models." Journal of Accounting Research 34 (1996). View Details
Article | Journal of Financial Economics
The Challenges of Investor Communication: The Case of CUC International, Inc.
Keywords: Communication; Business Ventures; Problems and Challenges;
Healy, Paul M., and Krishna G. Palepu. "The Challenges of Investor Communication: The Case of CUC International, Inc." Journal of Financial Economics 38, no. 2 (June 1995): 111–140. View Details
The Effect of Firms' Financial Disclosure Strategies on Stock Prices
Keywords: Strategy; Stocks; Finance;
Palepu, Krishna G., and Paul M. Healy. "The Effect of Firms' Financial Disclosure Strategies on Stock Prices." Accounting Horizons 7 (March 1993): 1–11. View Details
Does Corporate Performance Improve after Mergers?
Keywords: Mergers and Acquisitions; Performance; Business Ventures;
Healy, Paul M., Krishna G. Palepu, and Richard S. Ruback. "Does Corporate Performance Improve after Mergers?" Journal of Financial Economics 31, no. 2 (April 1992): 135–175. View Details
Article | Accounting Today
How Management Bonus Plans Affect Reported Earnings
Keywords: Management; Compensation and Benefits; Business Earnings;
Healy, Paul M. "How Management Bonus Plans Affect Reported Earnings." CPE Program Lesson 90-11. Accounting Today (1991). View Details
Earnings and Risk Changes Surrounding Primary Stock Offers
Keywords: Risk and Uncertainty; Business Earnings; Change; Stocks;
Healy, Paul M., and Krishna G. Palepu. "Earnings and Risk Changes Surrounding Primary Stock Offers." Journal of Accounting Research 28, no. 1 (spring 1990): 25–48. View Details
Effectiveness of Accounting-Based Dividend Covenants
Keywords: Accounting; Money;
Healy, Paul M., and Krishna G. Palepu. "Effectiveness of Accounting-Based Dividend Covenants." Journal of Accounting & Economics 12, nos. 1-3 (January 1990): 97–124. View Details
Article | Continental Bank Journal of Applied Corporate Finance
How Do Investors Interpret Firms' Financial Decisions
Keywords: Finance; Decision Making; Investment;
Healy, Paul M., and Krishna G. Palepu. "How Do Investors Interpret Firms' Financial Decisions." Continental Bank Journal of Applied Corporate Finance 2, no. 3 (fall 1989). View Details
Earnings and Stock Splits
Paul Asquith, Paul M. Healy and Krishna G. Palepu
Keywords: Business Earnings; Stocks;
Asquith, Paul, Paul M. Healy, and Krishna G. Palepu. "Earnings and Stock Splits." Accounting Review 64, no. 3 (July 1989): 387–403. View Details
Article | Journal of Accounting, Auditing & Finance
Dividend Decisions and Earnings
Paul M. Healy and Franco Modigliani
Keywords: Stocks; Finance;
Healy, Paul M., and Franco Modigliani. "Dividend Decisions and Earnings." Journal of Accounting, Auditing & Finance 5, no. 1 (Winter 1990): 3–26. View Details
Earnings Information Conveyed by Dividend Initiations and Omissions
Keywords: Information; Money; Business and Shareholder Relations; Business Earnings;
Healy, Paul M., and Krishna G. Palepu. "Earnings Information Conveyed by Dividend Initiations and Omissions." Journal of Financial Economics 21, no. 2 (September 1988): 149–175. View Details
The Effect of Accounting Procedure Changes on CEO's Cash Salary and Bonus Compensation
Paul M. Healy, Sok-Hyon Kang and Krishna G. Palepu
Keywords: Accounting; Change; Compensation and Benefits;
Healy, Paul M., Sok-Hyon Kang, and Krishna G. Palepu. "The Effect of Accounting Procedure Changes on CEO's Cash Salary and Bonus Compensation." Journal of Accounting & Economics 9, no. 1 (April 1987): 7–34. View Details
Article | Journal of Accounting and Public Policy
Auditor Changes Following Big Eight Mergers with Non-Big Eight Audit Firms
Paul M. Healy and Tom Lys
Keywords: Accounting Audits; Change; Business Ventures; Mergers and Acquisitions;
Healy, Paul M., and Tom Lys. "Auditor Changes Following Big Eight Mergers with Non-Big Eight Audit Firms." Journal of Accounting and Public Policy 5, no. 4 (winter 1986): 251–265. View Details
The Effect of Bonus Schemes on Accounting Decisions
Keywords: Compensation and Benefits; Accounting; Decision Making;
Healy, Paul M. "The Effect of Bonus Schemes on Accounting Decisions." Journal of Accounting & Economics 7, nos. 1-3 (April 1985): 85–107. View Details
Chapter | Foreign Direct Investment | 1993
International Equity Acquisitions: Who, Where, and Why?
Keywords: Acquisition; Equity; International Finance;
Healy, Paul M., and Krishna G. Palepu. "International Equity Acquisitions: Who, Where, and Why?" In Foreign Direct Investment, edited by K. Froot. Chicago: University of Chicago Press, 1993. View Details
Chapter | Transforming Organizations | 1992
The Effects of Changes in Corporate Control on Firm Performance
Keywords: Corporate Governance; Performance; Organizational Change and Adaptation;
Healy, Paul M. "The Effects of Changes in Corporate Control on Firm Performance." In Transforming Organizations, edited by Thomas Kochan and Michael Useem. New York: Oxford University Press, 1992. View Details
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Working Paper | 2018
Analyzing Board-Level Drivers of CEO Succession Planning
J. Yo-Jud Cheng, Boris Groysberg and Paul M. Healy
Keywords: corporate governance; corporate boards; CEO succession; Corporate Governance;
Cheng, J. Yo-Jud, Boris Groysberg, and Paul M. Healy. "Analyzing Board-Level Drivers of CEO Succession Planning." Working Paper, June 2018. (Revise and Resubmit at Strategic Management Journal.) View Details
Director Perceptions of Their Boards' Effectiveness, Size and Composition, Dynamics, and Internal Governance
J. Yo-Jud Cheng, Boris Groysberg, Paul M. Healy and Rajesh Vijayaraghavan
Keywords: corporate governance; boards of directors; Corporate Governance; Governing and Advisory Boards; Performance Effectiveness; Perception;
Cheng, J. Yo-Jud, Boris Groysberg, Paul M. Healy, and Rajesh Vijayaraghavan. "Director Perceptions of Their Boards' Effectiveness, Size and Composition, Dynamics, and Internal Governance." Working Paper, May 2018. View Details
Who Pays for White-Collar Crime?
Paul Healy and George Serafeim
Using a proprietary dataset of 667 companies around the world that experienced white-collar crime, we investigate what drives punishment of perpetrators of crime. We find a significantly lower propensity to punish crime in our sample, where most crimes are not reported to the regulator, relative to samples in studies investigating punishment of perpetrators in cases investigated by U.S. regulatory authorities. Punishment severity is significantly lower for senior executives, for perpetrators of crimes that do not directly steal from the company, and at smaller companies. While economic reasons could explain these associations, we show that gender and frequency of crimes moderate the relation between punishment severity and seniority. Male senior executives and senior executives in organizations with widespread crime are treated more leniently compared to senior female perpetrators or compared to senior perpetrators in organizations with isolated cases of crime. These results suggest that agency problems could partly explain punishment severity.
Keywords: crime; Crime and Corruption; gender; Gender bias; women; women executives; corruption; legal aspects of business; firing; human capital; human resource management; corporate governance; Prejudice and Bias; Crime and Corruption; Judgments; Law Enforcement; Human Resources; Corporate Governance; Gender;
Healy, Paul, and George Serafeim. "Who Pays for White-Collar Crime?" Harvard Business School Working Paper, No. 16-148, June 2016. View Details
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The Use of Broker Votes to Reward Brokerage Firms' and Their Analysts' Research Activities
David A. Maber, Boris Groysberg and Paul M. Healy
In traditional markets, the price mechanism directs the flow of resources and governs the process through which supply and demand are brought into equilibrium. In the investment-research industry, broker votes perform these functions. Using detailed clinical data from a midsized investment bank for the years 2004 to 2007, we present evidence that institutional investors use broker votes to budget future aggregate commission payments across brokerage firms; that these votes are responsive to actions that brokerage-house analysts take to communicate with client investors; and that brokerage firms use client-supplied votes as a quasi allocation base to indirectly reward individual analysts for contributions to brokerage-wide commission payments. Overall, our results suggest that broker votes function as the nexus for a set of implicit contractual relationships between sell-side brokers, their affiliated analysts, and their buy-side clients.
Keywords: Markets for information; sell-side analysts; Commissions; Broker votes; compensation; Public and private communications; Management access; relational contracts; Voting; Balance and Stability; Research; Supply and Industry; Investment; Corporate Governance; Compensation and Benefits; Banking Industry;
Maber, David A., Boris Groysberg, and Paul M. Healy. "The Use of Broker Votes to Reward Brokerage Firms' and Their Analysts' Research Activities." Harvard Business School Working Paper, No. 14-074, February 2014. View Details
Cases and Teaching Materials
Case | HBS Case Collection | September 2019
Building a Meritocracy at Alghanim Industries
Paul M. Healy, Susanna Gallani and Esel Cekin
Healy, Paul M., Susanna Gallani, and Esel Cekin. "Building a Meritocracy at Alghanim Industries." Harvard Business School Multimedia/Video Case 120-702, September 2019. View Details
Case | HBS Case Collection | December 2016 (Revised July 2019)
Paul Healy and Eugene Soltes
Rajat Gupta, former managing director of McKinsey & Company; a director of Goldman Sachs, Procter & Gamble, and AMR; and a well-known philanthropist, was convicted of engaging in insider trading. The case explores Gupta's rise and the later legal problems he faced.
Keywords: insider trading; McKinsey; Ethics; Crime and Corruption; United States;
Healy, Paul, and Eugene Soltes. "Rajat Gupta." Harvard Business School Case 117-004, December 2016. (Revised July 2019.) View Details
Case | HBS Case Collection | July 2019 (Revised September 2019)
The Homes Cycling Shop
Healy, Paul M. "The Homes Cycling Shop." Harvard Business School Case 120-019, July 2019. (Revised September 2019.) View Details
Case | HBS Case Collection | June 2019 (Revised July 2019)
Paul M. Healy, Susanna Gallani and Esel Çekin
Building on his father's legacy, Omar Alghanim (MBA 2002) had been working on strengthening a performance-driven culture based on meritocracy in the family business, Alghanim Industries. The task had been particularly challenging because of traditional Middle East practice of relying on relationships and influence to conduct business. Omar's vision attracted and empowered like-minded employees who were rewarded on merit and who delivered on the firm's mission of providing excellent service to its customers. Together, they revamped the company's performance and compensation system and established a well-structured control and compliance mechanism. The next challenge for Omar was to transform the workforce from a mono-culture, male-dominant expat community to a diverse mix of people, cultures, backgrounds, and viewpoints. In particular, he needed to find a way to attract talented women and local Kuwaitis to become part of his organization.
Keywords: meritocracy; Social Norms; Family Business; Organizational Culture; Performance; Diversity; Organizational Change and Adaptation; Middle East; Kuwait;
Healy, Paul M., Susanna Gallani, and Esel Çekin. "Building a Meritocracy at Alghanim Industries." Harvard Business School Case 119-019, June 2019. (Revised July 2019.) View Details
Case | HBS Case Collection | August 2018 (Revised February 2019)
Revenue Recognition at HBP
Paul Healy and Siko Sikochi
In early 2014, Paul Bills, CFO of Harvard Business Publishing (HBP), sat down with David Wan, the company's CEO, to discuss budget preparations for the coming year. Bills noted that the performance of Corporate Learning, one of HBP's three business units, would be affected by a business model change for its largest product that required a change in the timing of revenue recognition. Corporate Learning was in the process of revamping its flagship product, Harvard Manage-Mentor (HMM) from version 11.0 (HMM11) to version 12.0 (HMM12). The revamped software would be hosted exclusively on HBP's server rather than on its clients' servers, allowing updates to take place continuously. Given the change, accounting standards required HBP to change the recognition of revenue from the date of software delivery (for HMM11) to ratable recognition over its contract life (for HMM12). As Bills and Wan discussed the accounting change, they recognized that its impact on Corporate Learning's and HBP's performance could be material and would have to be reflected in the budget. In addition, they wondered how the new accounting would affect the company's policy for awarding sales incentive compensation on HMM, as well as how they communicated with employees and the firm's sole shareholder, the Harvard Business School.
Keywords: Accrual Accounting; Budgets and Budgeting; Revenue Recognition; Financial Reporting; Publishing Industry; Education Industry; United States;
Healy, Paul, and Siko Sikochi. "Revenue Recognition at HBP." Harvard Business School Case 119-029, August 2018. (Revised February 2019.) View Details
Teaching Note | HBS Case Collection | March 2019
PCAOB Efforts to Improve Audit Quality (A) and (B)
Aiyesha Dey and Paul Healy
Teaching Note for HBS Nos. 118-108 and 118-109.
Dey, Aiyesha, and Paul Healy. "PCAOB Efforts to Improve Audit Quality (A) and (B)." Harvard Business School Teaching Note 119-017, July 2018. View Details
Case | HBS Case Collection | November 2018
Governance Transition at Anadolu Group
Paul M. Healy and Esel Y. Cekin
Kamil Yazici and Izzet Ozilhan founded and built Anadolu Group Holding—a family business that grew into a multi-billion-dollar regional powerhouse. For 57 years they were equal partners in running the company. They then handed over a leadership role to a next generation family member, Izzet's son Tuncay, who became the CEO and later also chairman. Under Tuncay's leadership, the company was primarily run by professional managers, supplemented by a limited number of second- and third-generation family members in senior executive positions. However, in 2017, when the number of next-generation family members reached 85, Kamil and Tuncay began work on a governance structure they hoped would sustain the company when they left. Under their plan, family members would no longer be allowed to hold general management positions. As a result, Tuncay retired as CEO and other family members with senior executive roles resigned. A holding company was created to bring all the company's subsidiaries under a common structure. And a process was created to allow some members of the two surviving families to hold board seats. Although the stock market reacted positively to the increased transparency brought about by the changes, it remains to be seen whether the new formula will achieve its goal of successfully transitioning the company from a family-managed business to professionally run company.
Keywords: family-managed business; professionally-run company; second-generation; third-generation; governance; governance changes; succession planning; corporate culture; shareholders; board of directors; long-term sustainability; conglomerate; Family Business; Corporate Governance; Change Management; Management Succession; Leadership; Transition; Organizational Structure; Consumer Products Industry; Turkey; Central Asia; Middle East;
Healy, Paul M., and Esel Y. Cekin. "Governance Transition at Anadolu Group." Harvard Business School Case 119-048, November 2018. View Details
Supplement | HBS Case Collection | June 2018
PCAOB Efforts to Improve Audit Quality (B): Excerpts of Public Comment Letters
Dey, Aiyesha, and Paul Healy. "PCAOB Efforts to Improve Audit Quality (B): Excerpts of Public Comment Letters." Harvard Business School Supplement 118-109, June 2018. View Details
PCAOB Efforts to Improve Audit Quality (A)
Dey, Aiyesha, and Paul Healy. "PCAOB Efforts to Improve Audit Quality (A)." Harvard Business School Case 118-108, June 2018. (Revised July 2018.) View Details
Case | HBS Case Collection | August 2017 (Revised December 2017)
Accounting for Nuclear Power Provisions at RWE
Paul Healy and Jonas Heese
In early 2016, RWE, a utility that operates nuclear power plants in Germany, came under scrutiny from regulators and the media over the adequacy of its provisions for costs of decommissioning and dismantling (D&D) its nuclear power plants. Accounting standards required utilities to record the present value of projected D&D costs as a liability. However, there were many uncertainties associated with these estimates given the actual cash outlays that would be incurred decades into the future. In addition, German government bond rates used to discount projected future costs had fallen to record lows, and RWE as well as its competitors were struggling with depressed electricity prices. Would RWE's provisions be adequate to cover the future costs?
Keywords: liabilities; provisions for long-term obligations; discounting; Accounting; Energy Generation; Energy Industry; Germany;
Healy, Paul, and Jonas Heese. "Accounting for Nuclear Power Provisions at RWE." Harvard Business School Case 118-013, August 2017. (Revised December 2017.) View Details
Teaching Note | HBS Case Collection | May 2017
Teaching Note for HBS Case No.117-004, "Rajat Gupta"
Healy, Paul, and Eugene Soltes. "Rajat Gupta." Harvard Business School Teaching Note 117-068, May 2017. View Details
Supplement | HBS Case Collection | November 2015 (Revised March 2018)
Air Products' Pursuit of Airgas (B)
Charles C.Y. Wang, Paul M. Healy and Kyle Thomas
Wang, Charles C.Y., Paul M. Healy, and Kyle Thomas. "Air Products' Pursuit of Airgas (B)." Harvard Business School Supplement 116-025, November 2015. (Revised March 2018.) View Details
Case | HBS Case Collection | November 2015 (Revised March 2018)
Air Products' Pursuit of Airgas (A)
Charles C.Y. Wang, Paul M. Healy, Penelope Rossano and Kyle Thomas
This case centers around the Air Products' hostile takeover attempt of Airgas in 2010. Air Products argued that its offer of a 38% premium is generous given Airgas' poor performance, which Air Products attributed to underperforming and entrenched managers at Airgas. On the other hand, Airgas' management argued that the company's recent struggles are cyclical and that Air Products' offer grossly undervalues Airgas' long-run potential. How might Airgas' management credibly communicate its conviction to shareholders? Should Airgas shareholders side with Air Products and accept a certain short term return, or should they side with Airgas' management and accept an uncertain but potentially higher long-term outcome? How should the Airgas board balance its responsibilities to short-term versus long-term shareholders?
Keywords: Acquisition; Business and Shareholder Relations; Industrial Products Industry; Energy Industry; Chemical Industry;
Wang, Charles C.Y., Paul M. Healy, Penelope Rossano, and Kyle Thomas. "Air Products' Pursuit of Airgas (A)." Harvard Business School Case 116-024, November 2015. (Revised March 2018.) View Details
Case | HBS Case Collection | October 2015
Transpower New Zealand: Evaluating Board Performance
Boris Groysberg, Paul M. Healy and Sarah L. Abbott
Mark Verbiest, Chairman of Transpower New Zealand, initiated a performance review of Transpower's board of directors. The review, which took four months to complete, provided board members with individualized feedback on their performance, as well as information on how the overall board functioned as a team. As Verbiest considered the feedback from this process he questioned, was Transpower's board operating at optimal performance levels? Was Transpower's new CEO receiving the support she needed to fulfill her responsibilities? And, in light of the evaluation's findings, what should the board's action plan be?
Keywords: board of directors; governance; leadership; Performance Evaluation; Governance; Leadership; Performance; Organizations; Human Resources; Decision Making; New Zealand;
Groysberg, Boris, Paul M. Healy, and Sarah L. Abbott. "Transpower New Zealand: Evaluating Board Performance." Harvard Business School Case 416-024, October 2015. View Details
Statoil: Transparency on Payments to Governments
George Serafeim, Paul M. Healy and Jérôme Lenhardt
The Statoil case describes the challenge of increasing transparency, in extractive industries, around host county government payments. The case describes Statoil's reasoning behind voluntarily disclosing host country government payments, and the events that led to this decision. It also articulates how both management and the board were thinking about difficult trade-offs in terms of costs and benefits in making this decision.
The case also describes self-regulatory and regulatory efforts to increase transparency. The first was the Extractive Industries Transparency Initiative (EITI), which is a set of reporting standards published by a coalition of companies, governments and non-governmental organizations (NGOs). The second was legislation enacted in the United States under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which requires certain disclosures by natural resource extractive companies that are subject to the reporting requirements of the US Securities and Exchange Commission (SEC). The SEC issued a final rule implementing the Dodd-Frank Act in 2013 but that rule had most recently been vacated by the US District Court and is now subject to being re-written by the SEC.
Therefore, the case allows for a discussion of firm-specific voluntary, industry self-regulatory and regulatory efforts in increasing transparency in extractive industries.
Keywords: corruption; disclosure; disclosure strategy; regulation; industry self-regulation; corporate governance; corporate accountability; bribery; sustainability; corporate social responsibility; Government Legislation; Cost vs Benefits; Corporate Disclosure; Mining; Mining Industry; United States;
Serafeim, George, Paul M. Healy, and Jérôme Lenhardt. "Statoil: Transparency on Payments to Governments." Harvard Business School Case 115-049, March 2015. View Details
Teaching Note | HBS Case Collection | April 2016
Three-Year Planning at Li & Fung Limited
Healy, Paul M. "Three-Year Planning at Li & Fung Limited." Harvard Business School Teaching Note 116-057, April 2016. View Details
A Challenger's Strategy: Pinar Abay at ING Bank Turkey
Paul M. Healy, Gautam Mukunda and Esel Çekin
In 2013, Pinar Abay was appointed as the CEO of ING Bank Turkey. At 34, she was the youngest bank CEO in Turkey's history. Her appointment raised eyebrows because of her youth and because her career at McKinsey had given her no day-to-day bank management experience. ING, however, wanted a younger leader who could relate to Turkey's young and digitally savvy population. Upon her appointment, Abay determined that major changes were required in operations, personnel and culture. She adopted a variety of innovative approaches to making these changes, ranging from non-traditional hires to sitting for hours in call centers to personally answering customer complaints on Twitter. As Turkey's 12th largest bank, however, ING Turkey lacked scale, so Abay and her team considered a number of non-traditional ways to organize distribution and market the bank to promote growth.
Keywords: Leadership; Change Management; Talent and Talent Management; Organizational Culture; Emerging Markets; Transformation; Banks and Banking; Growth and Development Strategy; Banking Industry; Turkey;
Healy, Paul M., Gautam Mukunda, and Esel Çekin. "A Challenger's Strategy: Pinar Abay at ING Bank Turkey." Harvard Business School Multimedia/Video Case 116-701, September 2015. View Details
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Paul Healy, Gautam Mukunda and Esel Çekin
Keywords: leadership; challenger's strategy; culture; innovation; performance management; talent acquisition; differentiation; transformation; Growth; emerging country; banking; digital banking; alternative channels; Leadership; Change Management; Talent and Talent Management; Organizational Culture; Emerging Markets; Transformation; Banks and Banking; Innovation and Invention; Growth and Development Strategy; Banking Industry; Turkey;
Healy, Paul, Gautam Mukunda, and Esel Çekin. "A Challenger's Strategy: Pinar Abay at ING Bank Turkey." Harvard Business School Case 116-023, October 2015. View Details
CreditEase: Providing Credit and Financial Services for China's Underclass
Lena G. Goldberg, Paul Healy and Nancy Hua Dai
In 2013 Ning Tang, who in 2006 founded CreditEase as a broker of P2P loans to unbanked individuals and small businesses in China, confronts the challenges of rapid growth and expansion in a changing regulatory environment. CreditEase needs to develop technology to manage its growth, address issues related to the company's expansion into products and services for China's growing high net worth (HNW) population, including questions about the suitability of its products and its vulnerability to bad debt losses and a potential leveling off of the growth in China's economy, and adjust to new and more intensive regulatory oversight. What should Tang do to position CreditEase so that it can continue to fulfill its mission of making financial products and services available to millions of underserved Chinese while branching out into other, potentially riskier lines of business and ensuring continuing compliance with evolving laws and regulations? Will its rapid growth be sustainable?
Keywords: P2P Lending; HNW products and services; Business growth; Business Start-ups; law; Government Regulation; change management; credit; Microcredit; Financing and Loans; banking; Innovation and Management; Developing Countries and Economies; Corporate Entrepreneurship; Social Entrepreneurship; Law; Financing and Loans; Change; China;
Goldberg, Lena G., Paul Healy, and Nancy Hua Dai. "CreditEase: Providing Credit and Financial Services for China's Underclass." Harvard Business School Case 315-027, October 2014. View Details
Case | HBS Case Collection | June 2014 (Revised May 2017)
Southeastern Asset Management Challenges Buyout at Dell
Paul Healy, Suraj Srinivasan and Aldo Sesia
In late 2012, Michael Dell wants to take Dell Inc., the company he founded, private. Mr. Dell believes that the successful company's transformation from a personal computer (PC) manufacturer to an enterprise solutions and services provider (ESS) is dependent on going private without the short-term results scrutiny public companies face. He and a private equity firm, Silver Lake Partners, have made an offer for the company, which Dell Inc.'s board has accepted. The deal requires the vote of a majority of shareholders. Southeastern Asset Management, an investment firm, and Dell Inc.'s second largest shareholder behind Mr. Dell strongly oppose the deal because the offer is well below what Southeastern believes is Dell Inc.'s intrinsic value. Southeastern, along with activist investor Carl Icahn, wage a campaign to defeat the go-private deal and propose a leveraged recapitalization as an alternative. On several occasions it appears that the deal will be voted down by shareholders, but rule changes made by Dell Inc.'s Board eventually pave the way for Mr. Dell to take the eponymous company private—for a price only slightly higher than the original bid. The case describes the reasons why Mr. Dell wants to take Dell Inc. private, why Southeastern and Icahn oppose the deal, the specifics of both the Dell/Silver Lake bid and of Southeastern's/Icahn's leveraged recapitalization proposals, and the events that took place.
Keywords: Leveraged Buyout Transaction; leveraged buyouts; leveraged recapitalization; management buyout; Dell, Inc.; hedge fund; corporate accountability; corporate governance; corporate governance theory; valuation; valuation ratios; valuation methodologies; board of directors; boards of directors; Carl Icahn; computer industry; computer services industries; proxy contest; proxy battles; proxy fight; proxy advisor; Financial Accounting; financial analysis; Financial ratios; corporate finance; finance; Corporate Accountability; Corporate Governance; Corporate Finance; Leveraged Buyouts; Computer Industry; United States;
Healy, Paul, Suraj Srinivasan, and Aldo Sesia. "Southeastern Asset Management Challenges Buyout at Dell." Harvard Business School Case 114-015, June 2014. (Revised May 2017.) View Details
Case | HBS Case Collection | July 2014
Accounting for Virtual Goods at Zynga
Paul Healy, Gwen Yu and Aldo Sesia
Healy, Paul, Gwen Yu, and Aldo Sesia. "Accounting for Virtual Goods at Zynga." Harvard Business School Case 115-005, July 2014. View Details
Guiding Professional Accountants to Do the Right Thing
Paul Healy, V.G. Narayanan and Penelope Rossano
The Ethics Advisory Committee of the Institute of Chartered Accountants in England and Wales (ICAEW) provides training and support for member Chartered Accountants to help them deal with difficult professional situations. Members can seek help through call centers and in-person meetings with accounting experts in the field to discuss how to best handle difficult situations. In addition, the Ethics Advisory Committee meets regularly to identify new issues that raise questions for professional standards. This case examines professional standards for ICAEW Chartered Accountants and a number of challenging ethical situations that members have faced.
Keywords: accounting; ethics; professional conduct;
Healy, Paul, V.G. Narayanan, and Penelope Rossano. "Guiding Professional Accountants to Do the Right Thing." Harvard Business School Case 115-028, March 2015. View Details
Case | HBS Case Collection | October 2014 (Revised October 2014)
Valuation Ratios in the Airline Industry, 2013
Paul M. Healy and Penelope Rossano
Examines factors underlying differences in valuation multiples (price-to-earnings and price-to-book) across four firms in the airline industry.
Keywords: accounting; valuation; airline industry; multiples; Valuation; Accounting; Air Transportation Industry;
Healy, Paul M., and Penelope Rossano. "Valuation Ratios in the Airline Industry, 2013." Harvard Business School Case 115-013, October 2014. (Revised October 2014.) View Details
Case | HBS Case Collection | May 2014 (Revised April 2016)
Paul M. Healy and Keith Chi-ho Wong
Having been able to follow its own "three-year plan" on course constantly, Li & Fung Limited fell short of meeting its stretch earnings target for the first time in almost two decades, leading to a double-digit drop in stock price overnight. Questions were raised on the company's strategies pursued to meet such targets, and on the validity of its Three-Year Planning process.
Keywords: Li & Fung; financial reporting; financial planning; Accounting; Financial Reporting; Distribution Industry; Service Industry; Hong Kong; China;
Healy, Paul M., and Keith Chi-ho Wong. "Three-Year Planning at Li & Fung Limited." Harvard Business School Case 114-098, May 2014. (Revised April 2016.) View Details
Supplement | HBS Case Collection | April 2014
Managing Change at Axis Bank (B)
Paul Healy and Rachna Tahilyani
Axis Bank is India's third largest private sector bank. In April 2009, Shikha Sharma, an outsider was appointed as its CEO. She took over from a person who had overseen ten years of rapid growth at the bank. The selection of an outsider as the new CEO surprised many inside and outside the bank. Sharma changed the bank's hierarchical culture, strengthened the core team by appointing new talent where needed, sought to build its core processes and infrastructure, and filled several gaps in its business portfolio. Despite these changes, the stock market continues to undervalue Axis Bank compared with its chief rivals. In light of this, Axis Bank needs to figure out what more it needs to do to ensure that the market values the franchise correctly.
Keywords: Change Management; Transformation; Organizational Culture; Organizational Change and Adaptation; Leadership Style; Leading Change; Valuation; Finance; Banks and Banking; Financial Services Industry; Banking Industry; India;
Healy, Paul, and Rachna Tahilyani. "Managing Change at Axis Bank (B)." Harvard Business School Supplement 114-083, April 2014. View Details
Managing Change at Axis Bank (A)
Axis Bank is India's third largest private sector bank. In April 2009, Shikha Sharma, an outsider, was appointed as its CEO. She took over from a person who had overseen ten years of rapid growth at the bank. The selection of an outsider as the new CEO surprised many inside and outside the bank. Sharma changed the bank's hierarchical culture, strengthened the core team by appointing new talent where needed, sought to build its core processes and infrastructure, and filled several gaps in its business portfolio. Despite these changes, the stock market continues to undervalue Axis Bank compared with its chief rivals. In light of this, Axis Bank needs to figure out what more it needs to do to ensure that the market values the franchise correctly.
Healy, Paul, and Rachna Tahilyani. "Managing Change at Axis Bank (A)." Harvard Business School Case 114-082, March 2014. View Details
Supplement | HBS Case Collection | January 2014 (Revised October 2014)
Mittal Steel's Pursuit of Arcelor (B)
Lakshmi Mittal, CEO of Mittal Steel, a UK-based company with Indian roots, took advantage of a weakened Arcelor that had successfully won a bidding war for Canadian steel company Dofasco, with an unsolicited bid to buy the company. Mittal's plans for acquiring Arcelor were initially thwarted by concerted opposition from Arcelor's board and several European governments. To Mittal's further surprise, on May 26, Arcelor orchestrated a merger with the Russian steelmaker Severstal. Although the proposed merger did not offer Arcelor shareholders as much value as Mittal's deal, Arcelor had structured the deal in such a way that it did not require shareholders' approval. Mittal wondered how he should respond to the Severstal deal. Did it make sense to continue pursuing Arcelor or should he look for other ways to expand his steel empire?
Keywords: strategy; Fiduciary Duty; negotiation; steel; india; Europe; governance; mergers; board decisions; white knight; Valuation; Mergers and Acquisitions; Corporate Governance; Economics; Steel Industry; Canada; United Kingdom; India;
Healy, Paul M., and Penelope Rossano. "Mittal Steel's Pursuit of Arcelor (B)." Harvard Business School Supplement 114-057, January 2014. (Revised October 2014.) View Details
Case | HBS Case Collection | January 2014 (Revised September 2015)
Mittal Steel's Pursuit of Arcelor (A)
Keywords: strategy; Fiduciary Duty; negotiation; steel; india; Europe; governance; mergers; board decisions; white knight; Strategy; Negotiation; Mergers and Acquisitions; Corporate Governance; Cross-Cultural and Cross-Border Issues; Steel Industry; Canada; United Kingdom; Russia; India;
Healy, Paul M., and Penelope Rossano. "Mittal Steel's Pursuit of Arcelor (A)." Harvard Business School Case 114-056, January 2014. (Revised September 2015.) View Details
Supplement | HBS Case Collection | October 2013
Alcoa's Bid for Alcan (B)
Paul Healy and Penelope Rossano
In spring 2007, Alcoa CEO Alain Belda was concerned about the company's market position in light of increased competition from developing markets. China's recent entry into the aluminum market was affecting both supply and demand. Furthermore, downstream and upstream product was coming on-line from other parts of the world, including Russia. As a result, Alcoa had lost its historical market dominance and stock premium. Belda was convinced that for Alcoa to regain its leadership position, the company would have to increase efficiencies by expanding its scale, diversification and reach. The acquisition of a large competitor presented the best opportunity to achieve this goal and, as a result, he was particularly intrigued by Canadian rival, Alcan, because its assets would complement Alcoa's portfolio and enhance its reach. Further, Alcan had sold off non-aluminum assets, essentially making it a pure play in aluminum. That and its access to relatively cheap Canadian hydro power made it an even more intriguing acquisition opportunity for Alcoa. However, another major competitor, Rio Tinto, was also interested in Alcan; the company was in play.
Keywords: strategy; Acquisitions; Alcoa; Alcan; Rio Tinto; aluminum industry; consolidation; accounting; financial analysis; Consolidation; Market Participation; Financial Statements; Acquisition; Mining; Mining Industry; Canada; United States;
Healy, Paul, and Penelope Rossano. "Alcoa's Bid for Alcan (B)." Harvard Business School Supplement 114-030, October 2013. View Details
Case | HBS Case Collection | October 2013 (Revised December 2015)
Alcoa's Bid for Alcan (A)
Keywords: Acquisitions; strategy; aluminum; competition; consolidation; accounting; financials; Alcoa; Rio Tinto; Alcan; Metals and Minerals; Competition; Consolidation; Emerging Markets; Acquisition; Financial Statements; Manufacturing Industry; Canada; China; Russia;
Healy, Paul, and Penelope Rossano. "Alcoa's Bid for Alcan (A)." Harvard Business School Case 114-029, October 2013. (Revised December 2015.) View Details
Case | HBS Case Collection | August 2013 (Revised November 2013)
Gordon Brothers: Collateralizing Corporate Loans by Brands
Paul Healy and Maria Loumioti
The case explores the collateralization of intellectual property in a loan agreement between a highly leveraged apparel company and a large US bank. Leveraging intangibles in the credit market is a new practice that has significantly grown over the past few years. However, estimating their liquidation value is not directly intuitive, since intangibles are highly illiquid assets and have uncertain future cash flows. Can banks reliably secure corporate loans by intellectual property, and how can they alleviate the challenges in estimating a loan-to-value ratio for this collateral?
Keywords: Intangible assets; Accounting; Valuation; Finance; Restructuring; United States;
Healy, Paul, and Maria Loumioti. "Gordon Brothers: Collateralizing Corporate Loans by Brands." Harvard Business School Case 114-016, August 2013. (Revised November 2013.) View Details
The Fall of Enron (TN)
Paul Healy
Healy, Paul. "The Fall of Enron (TN)." Harvard Business School Teaching Note 113-128, April 2013. View Details
Case | HBS Case Collection | April 2013 (Revised November 2013)
Growing Financial Services in India: Aditya Birla Financial Services Group
Paul M. Healy and Rachna Tahilyani
Aditya Birla Financial Services Group is a large, broad-based, Indian financial services institution offering products ranging from life insurance and mutual funds to private equity. The company has witnessed a turnaround in recent years and regained lost market share. However, in recent years, concerns about investor protection has increased financial sector regulatory oversight specifically in the asset management and life insurance space and changed the rules of the game. Additionally, the central bank has invited new banks to apply for licenses to operate in the country. In the face of these changes, the company has to figure out what its strategy should be to realize its vision of becoming a leading integrated financial services player offering customers a menu of products that support their needs at different stages of their life.
Keywords: regulatory environment; Finance; Asset Management; Business Growth and Maturation; Transformation; Leadership Development; Leadership Style; Business Processes; Organizational Structure; Organizational Change and Adaptation; Competitive Strategy; Diversification; Segmentation; Financial Services Industry; Insurance Industry; India;
Healy, Paul M., and Rachna Tahilyani. "Growing Financial Services in India: Aditya Birla Financial Services Group." Harvard Business School Case 113-059, April 2013. (Revised November 2013.) View Details
Case | HBS Case Collection | April 2013 (Revised March 2014)
Value Partners and the Evergrande Situation
Paul Healy and Keith Chi-ho Wong
In June 2012, Cheah Cheng-Hye and his colleagues at Value Partners, a Hong-Kong-based investment firm, received a copy of a short-seller report alleging that Evergrande, one of China's largest property developers, was using fraudulent accounting and paying bribes to secure business. Evergrande's stock plummeted, and Value Partners, which had a sizable holding of Evergrande stock, had to determine how to respond to the allegations. The case provides an opportunity to review Value Partners' research approach to investing in Chinese companies and to assess the merits of the Evergrande allegations.
Keywords: asset management; financial analysis; value investing; China; Asset Management; Crime and Corruption; Financial Services Industry; China;
Healy, Paul, and Keith Chi-ho Wong. "Value Partners and the Evergrande Situation." Harvard Business School Case 113-113, April 2013. (Revised March 2014.) View Details
Case | HBS Case Collection | February 2013 (Revised June 2013)
BTG Pactual: Preserving a Partnership Culture
Keywords: stock market; IPO; investment banking; corporate lending; Initial Public Offering; Investment Banking; Banking Industry; Brazil;
Healy, Paul. "BTG Pactual: Preserving a Partnership Culture." Harvard Business School Case 113-094, February 2013. (Revised June 2013.) View Details
Teaching Plan | HBS Case Collection | March 2013
Corruption at Siemens (TP) (A), (B), (C) and (D)
This teaching plan is designed to be used in conjunction with the case Corruption at Siemens (A), HBS No. 108033 [and its related B and C cases] to help faculty deepen students' comprehension of business issues and to energize classroom discussion.
Keywords: corruption; management; Management; Medical Devices and Supplies Industry; Germany;
Healy, Paul. "Corruption at Siemens (TP) (A), (B), (C) and (D)." Harvard Business School Teaching Plan 113-092, March 2013. View Details
Background Note | HBS Case Collection | January 2013
Apartheid in South Africa
A short history of Apartheid in South Africa
Keywords: Apartheid; Race; Social Issues; South Africa;
Healy, Paul. "Apartheid in South Africa." Harvard Business School Background Note 113-084, January 2013. View Details
Supplement | HBS Case Collection | January 2013
Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (B)
Paul Healy, Clayton S. Rose and Penelope Rossano
Keywords: stockholders; Activist Investors; corruption; Conflict of Interests; Crime and Corruption; Executive Compensation; Energy Industry;
Healy, Paul, Clayton S. Rose, and Penelope Rossano. "Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (B)." Harvard Business School Supplement 113-093, January 2013. View Details
Rospil.info
Paul Healy, Karthik Ramanna and Matthew Shaffer
What should business leaders do about corruption? In December 2011, four HBS alumni met to debate how to engage the unprecedented protests against Vladimir Putin's corrupt government, which had erupted in Russia in response to alleged fraud in the recent parliamentary elections. A notable figure in the protests was anti-corruption blogger Alexey Navalny. Navalny used publicly available requests for tender, "crowd-sourcing," and volunteer experts to discover, expose, and encourage prosecution of corrupt dealings by the Russian government. These efforts made Navalny a cause célèbre in Western media and a popular figure with Russia's tech-savvy population. But was Navalny the right figure for business leaders in Russia to organize around? What were the risks of getting involved with a politically volatile activist?
Keywords: Leadership; Crime and Corruption; Government and Politics; Social and Collaborative Networks; Blogs; Information Industry; Russia;
Healy, Paul, Karthik Ramanna, and Matthew Shaffer. "Rospil.info." Harvard Business School Case 112-033, February 2012. (Revised June 2012.) View Details
Case | HBS Case Collection | November 2008 (Revised July 2019)
Paul Healy and Krishna Palepu
The case traces the rise of Enron, covering the company's business innovations, personnel management, and risk management processes. It then examines the company's dramatic fall including the extension of its trading model into questionable new businesses, the financial reporting problems, and governance breakdowns inside and outside the firm. The case offers students an opportunity to explore why Enron failed and to understand the systemic problems in governance that affected its board of directors, the audit committee, the external auditors, and financial analysts.
Keywords: Risk Management; Management Practices and Processes; Crime and Corruption; Financial Reporting; Corporate Governance; Governing and Advisory Boards;
Healy, Paul, and Krishna Palepu. "The Fall of Enron." Harvard Business School Case 109-039, November 2008. (Revised July 2019.) View Details
Case | HBS Case Collection | January 2010 (Revised April 2013)
Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A)
Paul Healy, Clayton S. Rose and Aldo Sesia
Aubrey McClendon, founder and CEO of Chesapeake Energy, was, according to Fortune Magazine, the highest paid U.S. CEO in 2008 receiving over $100 million in total compensation. McClendon received this compensation despite a significant drop in the company's stock price and financial performance during the year. The (A) case addresses the specifics of the compensation and the rationale for the compensation from the perspective of Chesapeake's board and its compensation committee including McClendon's role in consummating several joint ventures, which the board and committee believed positioned the company for future growth in the relatively young industry of unconventional natural gas exploration and extraction. In addition, the (A) case describes the role of the compensation committee and the company's executive performance measurement factors.
Keywords: Financial Statements; Financial Reporting; Price; Stock Options; Valuation; Joint Ventures; Business Growth and Maturation; Economic Growth; Growth and Development Strategy; Change Management; Energy Industry; United States;
Healy, Paul, Clayton S. Rose, and Aldo Sesia. "Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A)." Harvard Business School Case 110-047, January 2010. (Revised April 2013.) View Details
Healy, Paul. "Fighting Corruption at Siemens." Harvard Business School Teaching Note 112-089, March 2012. View Details
Paul Healy and Djordjija Petkoski
Healy, Paul, and Djordjija Petkoski. "Fighting Corruption at Siemens." Harvard Business School Multimedia/Video Case 112-702, March 2012. View Details
Case | HBS Case Collection | September 2011 (Revised January 2012)
Gerson Lehrman Group: Managing Risks
Boris Groysberg, Paul Healy and Sarah L. Abbott
It was June 2011 and Alexander Saint-Amand, President and CEO of Gerson Lehrman Group, the largest expert network firm globally, has found his firm once again in the midst of controversy. This controversy centered around a number of insider trading cases that had been brought against consultants working for competing expert network firms. While GLG was in no way implicated in these cases, and GLG had invested significantly in its compliance policies and controls in order to prevent the mishandling of public information, the entire industry was being impacted. Saint-Amand is faced with the challenge of deciding how best to handle this crisis.
Keywords: Risk Management;
Groysberg, Boris, Paul Healy, and Sarah L. Abbott. "Gerson Lehrman Group: Managing Risks." Harvard Business School Case 412-004, September 2011. (Revised January 2012.) View Details
Case | HBS Case Collection | March 2011 (Revised December 2019)
Wealth Management Crisis at UBS (A)
Paul M. Healy, George Serafeim and David Lane
The case describes the challenges that UBS faced as a result of the U.S. Department of Justice (DOJ) investigation for tax fraud, that claimed that UBS had helped some 52,000 U.S. residents hide billions of dollars in untaxed assets in secret Swiss accounts between 2000 and 2007, depriving the U.S. Treasury of hundreds of millions of dollars in taxes. Why did this happen inside UBS? What were the incentives and the corporate governance failures that led to these events? How should the board of directors of UBS respond to the requests of the tax and regulatory authorities?
Keywords: fraud; regulatory enforcement; Reputation incentives; crony capitalism; tax havens; legitimacy; multinational; strategic change; incentives; transparency; financial services; Taxation; Crime and Corruption; Global Range; Asset Management; Ethics; Problems and Challenges; Governing Rules, Regulations, and Reforms; Corporate Governance; Financial Services Industry; United States; Switzerland;
Healy, Paul M., George Serafeim, and David Lane. "Wealth Management Crisis at UBS (A)." Harvard Business School Case 111-082, March 2011. (Revised December 2019.) View Details
Teaching Note | HBS Case Collection | August 2011
Subprime Crisis and Fair-Value Accounting (TN)
Paul Healy, Krishna G. Palepu and George Serafeim
Teaching Note for 109-031.
Keywords: Fair Value Accounting; Mortgages; Standards; Financial Crisis;
Healy, Paul, Krishna G. Palepu, and George Serafeim. "Subprime Crisis and Fair-Value Accounting (TN)." Harvard Business School Teaching Note 112-027, August 2011. View Details
Supplement | HBS Case Collection | March 2011 (Revised February 2018)
Wealth Management Crisis at UBS (B)
The case describes the resolution of the U.S. Department of Justice (DOJ) investigation for tax fraud and the increasing pressure on the wealth management business.
Keywords: fraud; regulatory enforcement; Reputation incentives; crony capitalism; tax havens; legitimacy; multinational; strategic change; corporate governance; incentives; transparency; financial services; Wealth; Taxation; Crime and Corruption; Global Range; Governance; Business and Government Relations; Asset Management; United States;
Healy, Paul M., George Serafeim, and David Lane. "Wealth Management Crisis at UBS (B)." Harvard Business School Supplement 111-090, March 2011. (Revised February 2018.) View Details
Tool | January 2003 (Revised February 2011)
Business Analysis and Valuation Model (Version 5)
Paul M. Healy, Krishna G. Palepu and Jonathan Barnett
Once you enter company financial statements, this software enables you to standardize them to a common format, make any needed adjustments to the company's accounting, and make assumptions about the company's future performance. The model then provides financial ratios for the company, with benchmarks for the U.S. economy, company pro forma financial statements, and a company valuation using several standard valuation techniques. Available only in a CD-ROM, Windows-only format.
Keywords: Financial Statements; Standards; Mathematical Methods; Valuation;
"Business Analysis and Valuation Model (Version 5)." Harvard Business School Tool 103-701, January 2003. (Revised February 2011.) View Details
Case | HBS Case Collection | January 2011
Sidoti & Company: Launching a Micro-Cap Product
Boris Groysberg, Paul M. Healy and Sarah Abbott
It is 2010 and Sidoti & Company, a New York-based brokerage firm specializing in small capitalization stocks, has just launched a new product- micro cap stock research. The firm has hired a group of five analysts who will produce written research reports on micro-cap stocks, that is, publicly traded stocks with a market capitalization of less than $250 million. Peter Sidoti, Sidoti & Company's founder and CEO, knows that there is demand for this product. However, he is not entirely certain how this new business will function, both with respect to how the product is distributed and to how Sidoti & Company will get compensated for it. The case discusses Sidoti & Company's business model, and how the new business fits with, and differs from, that model. It discusses the challenges Sidoti faces in making this new business a success.
Keywords: Business Model; Financial Strategy; Product Launch; Strategic Planning; Corporate Strategy; Financial Services Industry; New York (city, NY);
Groysberg, Boris, Paul M. Healy, and Sarah Abbott. "Sidoti & Company: Launching a Micro-Cap Product." Harvard Business School Case 411-072, January 2011. View Details
Morgan Asset Management
It is 2010 and Guillermo Araoz, the equity research director at Morgan Asset Management (MAM), is considering his research budget for the year. Due to recent declines in the equity markets and MAM's sale of its mutual funds business, MAM has seen a decline in its assets under management and, consequently, in its research budget. The case describes the investment process at MAM, including how stocks are selected and portfolios are constructed, and discusses the way in which the research budget supports this process. Araoz is faced with the challenge of how best to allocate this smaller research budget without negatively impacting the firm's investment process and investment performance.
Keywords: Budgets and Budgeting; Asset Management; Financial Strategy; Investment; Resource Allocation; Research and Development; Financial Services Industry;
Groysberg, Boris, Paul M. Healy, and Sarah Abbott. "Morgan Asset Management." Harvard Business School Case 411-058, November 2010. View Details
Eddie Bauer (A)
Paul Healy, Sharon Katz and Aldo Sesia
In June 2005, Eddie Bauer, the specialty apparel retailer, emerged from bankruptcy. Under the plan of reorganization former creditors converted their debt into common shares, taking 100% ownership in the reconstituted company. Large banks-including Bank of America and J.P. Morgan Chase-were among the former creditors. In October 2005, Eddie Bauer stock was selling for $24 per share. Analysts were projecting target prices ranging from $22 to $35 per share. Account managers at Bank of America and J.P. Morgan Chase needed to assess whether to hold or sell their shares in Eddie Bauer.
Keywords: Financial Statements; Mergers and Acquisitions; Restructuring; Insolvency and Bankruptcy; Stock Shares; Valuation; Apparel and Accessories Industry; Retail Industry; United States;
Healy, Paul, Sharon Katz, and Aldo Sesia. "Eddie Bauer (A)." Harvard Business School Case 110-008, August 2009. (Revised February 2013.) View Details
Supplement | HBS Case Collection | August 2009 (Revised August 2010)
Eddie Bauer (B)
Paul M. Healy, Sharon P. Katz and Aldo Sesia
In February 2007, shareholders of Eddie Bauer, the specialty apparel retailer, were scheduled to vote on management's proposed sale of the company to two private equity firms. More than 50% of outstanding shares in Eddie Bauer needed to be voted in favor of the deal for it to be finalized. Shareholders needed to decide whether to vote for or against the proposed sale, which was fully endorsed by the board of Eddie Bauer.
Keywords: Financial Statements; Mergers and Acquisitions; Governing and Advisory Boards; Privatization; Valuation; Apparel and Accessories Industry; Retail Industry; United States;
Healy, Paul M., Sharon P. Katz, and Aldo Sesia. "Eddie Bauer (B)." Harvard Business School Supplement 110-009, August 2009. (Revised August 2010.) View Details
Eddie Bauer (C)
The Eddie Bauer (C) case describes what happened and the outlook for the retailer.
Keywords: Mergers and Acquisitions; Decision Choices and Conditions; Voting; Governing and Advisory Boards; Apparel and Accessories Industry; Retail Industry; United States;
Healy, Paul M., Sharon P. Katz, and Aldo Sesia. "Eddie Bauer (C)." Harvard Business School Supplement 110-010, August 2009. (Revised August 2010.) View Details
Credit Suisse Group: Managing Equity Research as a Business
In 2003, in the midst of industry turmoil and company-specific challenges, Stefano Natella was named Global Head of Equity Research at Credit Suisse. Over a six-year period, Natella implemented and refined a new methodology for valuing equity research analysts, both individually and as a collective unit. Natella's system, known as the 'Scorecard' was also used as the basis for compensating, hiring, and promoting analysts. Over time, the Scorecard was refined to allow Credit Suisse to improve its customer service efforts in a way that maximized profitability for the firm.
Keywords: Business Model; Change Management; Customer Satisfaction; Compensation and Benefits; Selection and Staffing; Balanced Scorecard; Organizational Change and Adaptation; Financial Services Industry;
Groysberg, Boris, Paul M. Healy, and Sarah Abbott. "Credit Suisse Group: Managing Equity Research as a Business." Harvard Business School Case 410-073, January 2010. (Revised April 2010.) View Details
Teaching Note | HBS Case Collection | November 2009
Eddie Bauer (TN) (A), (B) and (C)
Paul M. Healy and Sharon P. Katz
Teaching Note for [110008] [110009], and [110010].
Keywords: Apparel and Accessories Industry;
Healy, Paul M., and Sharon P. Katz. "Eddie Bauer (TN) (A), (B) and (C)." Harvard Business School Teaching Note 110-041, November 2009. View Details
Case | HBS Case Collection | October 2008 (Revised August 2009)
Subprime Crisis and Fair-Value Accounting
Paul M. Healy, Krishna G. Palepu and George Serafeim
This case examines the challenges in implementing fair value accounting for mortgage instruments, the role of accounting in the sub-prime crisis, and proposals for revising accounting standards given the crisis.
Keywords: Fair Value Accounting; Financial Crisis; Debt Securities; Mortgages; Standards;
Healy, Paul M., Krishna G. Palepu, and George Serafeim. "Subprime Crisis and Fair-Value Accounting." Harvard Business School Case 109-031, October 2008. (Revised August 2009.) View Details
Financial Reporting Problems at Molex, Inc. (A)
Following an accounting problem at Molex, the firm's auditors request changes in management. The board of directors has to decide whether the auditors' concerns have merit or whether, as management argues, the accounting issue is immaterial.
Keywords: Managerial Roles; Governing and Advisory Boards; Financial Reporting; Relationships; Resignation and Termination; Accounting Audits;
Healy, Paul M. "Financial Reporting Problems at Molex, Inc. (A)." Harvard Business School Case 105-082, June 2005. (Revised July 2009.) View Details
Corruption at Siemens (A)
Paul M. Healy and Maria Loumioti
Keywords: Crime and Corruption; Electronics Industry;
Healy, Paul M., and Maria Loumioti. "Corruption at Siemens (A)." Harvard Business School Case 108-033, June 2008. (Revised May 2009.) View Details
Supplement | HBS Case Collection | June 2008 (Revised May 2009)
Corruption at Siemens (B)
Healy, Paul M., and Maria Loumioti. "Corruption at Siemens (B)." Harvard Business School Supplement 108-034, June 2008. (Revised May 2009.) View Details
Corruption at Siemens (C)
Healy, Paul M., and Maria Loumioti. "Corruption at Siemens (C)." Harvard Business School Supplement 108-035, June 2008. (Revised May 2009.) View Details
Corruption at Siemens (D)
Healy, Paul M., and Maria Loumioti. "Corruption at Siemens (D)." Harvard Business School Supplement 108-036, June 2008. (Revised May 2009.) View Details
Teaching Note | HBS Case Collection | September 2007 (Revised June 2008)
Revenue Recognition Problems in the Communications Equipment Industry (TN)
Keywords: Problems and Challenges; Revenue; Communications Industry;
Healy, Paul M. "Revenue Recognition Problems in the Communications Equipment Industry (TN)." Harvard Business School Teaching Note 108-028, September 2007. (Revised June 2008.) View Details
Teaching Note | HBS Case Collection | September 2007 (Revised January 2008)
Prudential Securities (TN)
Paul M. Healy, Boris Groysberg and Geoff Marietta
Keywords: Financial Instruments; Financial Services Industry;
Healy, Paul M., Boris Groysberg, and Geoff Marietta. "Prudential Securities (TN)." Harvard Business School Teaching Note 108-027, September 2007. (Revised January 2008.) View Details
Valuation at Novartis
Keywords: Valuation; Pharmaceutical Industry;
Healy, Paul M. "Valuation at Novartis." Harvard Business School Case 108-041, October 2007. View Details
Teaching Note | HBS Case Collection | August 2005 (Revised September 2007)
Financial Reporting Problems at Molex, Inc. (TN) (A), (B) & (C)
Keywords: Financial Reporting; Problems and Challenges; Accounting Industry;
Healy, Paul M. "Financial Reporting Problems at Molex, Inc. (TN) (A), (B) & (C)." Harvard Business School Teaching Note 106-018, August 2005. (Revised September 2007.) View Details
Teaching Note | HBS Case Collection | September 2007
Merrill Lynch in 2003: Sunny Skies Ahead? (TN)
Keywords: Financial Services Industry;
Healy, Paul M. "Merrill Lynch in 2003: Sunny Skies Ahead? (TN)." Harvard Business School Teaching Note 108-025, September 2007. View Details
DICOM Group plc and Captiva Software Corp. (TN)
Keywords: Software; Technology; Information Technology Industry;
Healy, Paul M. "DICOM Group plc and Captiva Software Corp. (TN)." Harvard Business School Teaching Note 108-026, September 2007. View Details
Revenue Recognition Problems in the Communications Equipment Industry
Paul M. Healy and Arjuna J Costa
Designed to explore recognition issues in the context of a potential market downturn. In late 2000, Lucent Technologies reports multiple revisions to its recent financial results due to revenue recognition problems, leading to a dramatic decline in its stock price. This disclosure comes in the wake of a period of spectacular growth for the communications equipment industry during the 1990s. From the perspective of a securities analyst covering the industry, are the troubles at Lucent indicative of larger revenue recognition issues throughout the industry? Facilitates a discussion of potential early warning signs of the risks faced by Lucent's competitors.
Keywords: Corporate Disclosure; Revenue Recognition; Policy; Supply and Industry; Performance; Communications Industry;
Healy, Paul M., and Arjuna J Costa. "Revenue Recognition Problems in the Communications Equipment Industry." Harvard Business School Case 107-025, August 2006. (Revised August 2007.) View Details
Case | HBS Case Collection | August 2005 (Revised April 2007)
DICOM Group plc and Captiva Software Corp.
Compares two companies in the information capture software industry. Asks students to analyze and compare the performance of two companies (one in the United Kingdom and the other in the United States) from the perspective of a buy-side analyst reporting to the manager of the firm's Global Technology Fund. The analyst must decide whether to recommend one or both stocks to the fund manager. Provides an opportunity to compare the differences in terminology, presentation of financial reports, and accounting methods for the U.S. and U.K. firms.
Keywords: History; Financial Management; Environmental Accounting; Activity Based Costing and Management; Financial Reporting; Performance; Performance Evaluation; Financial Statements; Economic Growth; Fair Value Accounting; Information Industry; Computer Industry; United Kingdom; United States;
Healy, Paul M. "DICOM Group plc and Captiva Software Corp." Harvard Business School Case 106-015, August 2005. (Revised April 2007.) View Details
Teaching Note | HBS Case Collection | February 2007 (Revised April 2007)
10 Uncommon Values®: Optimizing the Stock-Selection Process (TN)
Keywords: Stocks; Values and Beliefs;
Groysberg, Boris, and Paul M. Healy. "10 Uncommon Values®: Optimizing the Stock-Selection Process (TN)." Harvard Business School Teaching Note 407-073, February 2007. (Revised April 2007.) View Details
10 Uncommon Values®: Optimizing the Stock-Selection Process
Paul M. Healy and Boris Groysberg
In 2003, Steve Hash, research director at Lehman Brothers, prepared to initiate the firm's "Ten Uncommon Values" stock-picking process for the year. An investment committee had to pick the 10 best stocks from about 100 stock ideas presented by the firm's analysts. The performance of the stocks selected for the Ten Uncommon Values had historically been strong--an investment strategy to acquire the recommended stocks and hold them for one year would have outperformed the S&P 500 for 39 of the last 54 years. However, during the latest three years--2000 to 2002--the recommendations had performed poorly, generating an average return of -22.5% vs. -11.7% for the S&P 500. Hash pondered several questions: What was the importance of the Ten Uncommon Values for Lehman Brothers and its clients? How much time and effort should the firm put into the process of selecting stocks for the report? How many members should be on the Investment Policy Committee, and who should be selected? What should the process for selection be? Should analysts whose stocks were selected be compensated for their picks? Finally, should they continue the process? Teaching Purpose: Using both qualitative and quantitative data, to allow students to discuss a range of issues: the optimal process of selecting stocks, the optimal size of the committee, how much time to spend with each analyst, private or public voting on stocks by the committee members, the right decision-making process, and whether incentives play a role in the process.
Keywords: Stocks; Investment; Financial Strategy; Decision Making; Groups and Teams; Financial Services Industry; United States;
Healy, Paul M., and Boris Groysberg. "10 Uncommon Values®: Optimizing the Stock-Selection Process." Harvard Business School Case 405-022, November 2004. (Revised March 2007.) View Details
Teaching Note | HBS Case Collection | February 2007
HBS Financial Accounting Tutorial (TN)
David F. Hawkins and Paul M. Healy
Keywords: Accounting; Finance; Information;
Hawkins, David F., and Paul M. Healy. "HBS Financial Accounting Tutorial (TN)." Harvard Business School Teaching Note 107-063, February 2007. View Details
Tutorial | February 2007
HBS Financial Accounting Tutorial
Keywords: Accounting;
"HBS Financial Accounting Tutorial." Harvard Business School Tutorial 107-707, February 2007. View Details
Supplement | HBS Case Collection | December 2006
Financial Reporting Problems at Molex, Inc. (C)
Keywords: Financial Reporting; Problems and Challenges; Technology Industry;
Healy, Paul M. "Financial Reporting Problems at Molex, Inc. (C)." Harvard Business School Supplement 107-049, December 2006. View Details
Financial Reporting Problems at Molex, Inc. (B)
Healy, Paul M. "Financial Reporting Problems at Molex, Inc. (B)." Harvard Business School Supplement 107-048, December 2006. View Details
Case | HBS Case Collection | May 2006
Examines the challenges facing a money manager who owns stock in Nokia, the leading wireless handset provider. Two analysts covering the stock make very different predictions about the economies of the industry, Nokia's future performance, and stock recommendations. Whose advice should the money manager follow?
Keywords: Financial Reporting; Forecasting and Prediction; Performance Effectiveness; Performance Evaluation; Problems and Challenges; Electronics Industry;
Healy, Paul M. "Nokia in 2003." Harvard Business School Case 106-067, May 2006. View Details
Teaching Note | HBS Case Collection | November 2005 (Revised February 2006)
Financial Accounting: An Online Introductory Course (TN)
Keywords: Accounting; Financial Reporting;
Hawkins, David F., and Paul M. Healy. "Financial Accounting: An Online Introductory Course (TN)." Harvard Business School Teaching Note 106-041, November 2005. (Revised February 2006.) View Details
United Parcel Service's IPO
Paul M. Healy, Brett Laschinger and Ajay Shroff
Examines the valuation of United Parcel Service (UPS) at the time of its IPO in mid-1999. Offers students the opportunity to assess UPS's current performance relative to its major competitor, Federal Express (FedEx), and to judge whether that performance is sustainable. Students then make projections of UPS's future earnings performance, estimate on IPO price, and assess the reasonableness of their estimate compared to the valuation of FedEx and best-in-class leaders.
Keywords: Initial Public Offering; Valuation; Performance Evaluation; Competition; Shipping Industry; Georgia (state, US);
Healy, Paul M., Brett Laschinger, and Ajay Shroff. "United Parcel Service's IPO." Harvard Business School Case 103-015, October 2002. (Revised October 2005.) View Details
Tutorial | June 2005
Prematriculation Financial Accounting Tutorial/Module
David F. Hawkins, Paul M. Healy and Ratna G. Sarkar
The Financial Accounting course is an introduction to the fundamental concepts of financial accounting in a management context. The course describes the business activities for Global Grocer, a small retail franchise specializing in gourmet foods and specialty kitchen implements from all over the world. In the course, students follow the story of Global Grocer from its inception through the first year of operation. The course teaches students how accounting systems are used to record the day-to-day economic activities of a business and places special emphasis on understanding accounting terminology. Students learn fundamental accounting concepts and then apply those concepts in a detailed examination of the financial statements used to describe the business. Throughout the course, students are presented with real-world challenges that require them to interpret the financial data to find answers.
Keywords: Accounting; Performance; Financial Statements;
"Prematriculation Financial Accounting Tutorial/Module." Harvard Business School Tutorial 105-708, June 2005. View Details
Pre-matriculation Accounting Tutorial (TN)
Hawkins, David F., and Paul M. Healy. "Pre-matriculation Accounting Tutorial (TN)." Harvard Business School Teaching Note 105-074, May 2005. View Details
Case | HBS Case Collection | April 2005
Merrill Lynch in 2003: Sunny Skies Ahead?
Boris Groysberg, Paul M. Healy and David Kiron
Merrill Lynch (ML) is at a crossroads. Stan O'Neal became its CEO and implemented a radical cost-cutting program. In addition, the company dot-com continues to recover from the fallout from the Enron and dot-com scandals. What are the future prospects for ML? Can the firm compete against its traditional competitors or against the recently merged Goliaths of banking, such as Citigroup?
Keywords: Management Teams; Forecasting and Prediction; Financial Condition; Investment; Financial Services Industry; Insurance Industry; United States;
Groysberg, Boris, Paul M. Healy, and David Kiron. "Merrill Lynch in 2003: Sunny Skies Ahead?" Harvard Business School Case 105-067, April 2005. View Details
Boris Groysberg, Paul M. Healy and Amanda Cowen
Prudential Insurance Co. attempted to diversify into financial services by building an investment banking franchise. Prudential's initial foray into the industry was its acquisition of The Bache Group in 1982. In 2000, the company decided to exit investment banking. The firm adopted various strategic positions and human resource management strategies during the 18 years it struggled to compete successfully against prestigious incumbents. Although Prudential's efforts to establish a top-tier investment bank ultimately failed, other firms did succeed in this endeavor.
Keywords: Investment Banking; Corporate Strategy; Competitive Strategy; Market Entry and Exit; Diversification; Mergers and Acquisitions; Financial Services Industry; Insurance Industry;
Groysberg, Boris, Paul M. Healy, and Amanda Cowen. "Prudential Securities." Harvard Business School Case 104-008, May 2004. (Revised April 2005.) View Details
Case | HBS Case Collection | January 2004 (Revised March 2005)
Valuation Ratios in the Restaurant Industry
Examines factors underlying differences in valuation multiples (price-earnings and price-to-book) across four firms in the restaurant industry.
Keywords: Business Earnings; Valuation; Mathematical Methods; Food and Beverage Industry;
Healy, Paul M., and Krishna G. Palepu. "Valuation Ratios in the Restaurant Industry." Harvard Business School Case 104-066, January 2004. (Revised March 2005.) View Details
Valuation Ratios in the Restaurant Industry (TN)
Teaching Note to (9-104-066).
Keywords: Food and Beverage Industry;
Healy, Paul M. "Valuation Ratios in the Restaurant Industry (TN)." Harvard Business School Teaching Note 105-056, February 2005. View Details
City of New York, The (TN)
Teaching Note for (9-198-030).
Keywords: New York (city, NY);
Healy, Paul M. "City of New York, The (TN)." Harvard Business School Teaching Note 104-033, September 2003. View Details
CUC International, Inc. (A) (TN)
Teaching Note for (9-192-099)
Healy, Paul M. "CUC International, Inc. (A) (TN)." Harvard Business School Teaching Note 104-028, August 2003. View Details
United Parcel Service's IPO (TN)
Keywords: Distribution Industry;
Healy, Paul M. "United Parcel Service's IPO (TN)." Harvard Business School Teaching Note 104-029, August 2003. View Details
Teaching Note | HBS Case Collection | February 2000 (Revised August 2003)
Thermo Electron Corporation: Financial Analysis TN
Healy, Paul M. "Thermo Electron Corporation: Financial Analysis TN." Harvard Business School Teaching Note 100-083, February 2000. (Revised August 2003.) View Details
Boston Chicken, Inc. TN
Keywords: Food and Beverage Industry; United States;
Healy, Paul M. "Boston Chicken, Inc. TN." Harvard Business School Teaching Note 100-084, February 2000. (Revised August 2003.) View Details
Brierley Investments Limited TN
Keywords: Financial Services Industry; New Zealand;
Healy, Paul M. "Brierley Investments Limited TN." Harvard Business School Teaching Note 100-085, February 2000. (Revised August 2003.) View Details
Krispy Kreme Doughnuts (TN)
Keywords: Food and Beverage Industry; New York (city, NY);
Healy, Paul M. "Krispy Kreme Doughnuts (TN)." Harvard Business School Teaching Note 104-024, August 2003. View Details
Valuation Ratios in the Airline Industry (TN)
Keywords: Valuation; Air Transportation Industry;
Healy, Paul M. "Valuation Ratios in the Airline Industry (TN)." Harvard Business School Teaching Note 104-025, August 2003. View Details
Computer Associates International Inc.: Governance and Investor Communication Challenge (TN)
Keywords: Computer Industry; Information Technology Industry;
Healy, Paul M. "Computer Associates International Inc.: Governance and Investor Communication Challenge (TN)." Harvard Business School Teaching Note 104-026, August 2003. View Details
Pre-Paid Legal Services, Inc.
Paul M. Healy and Jacob Cohen
Pre-Paid Legal Services' business model reveals two key issues--managing the sales force and sales growth and managing claims. Students analyze the economics of the business and consider how to measure firm performance, how to evaluate and reward the sales force, and what services to offer. The case also discusses a Fortune article criticizing Pre-Paid Legal's method of reporting sales force commissions. Students are asked to evaluate Fortune's analysis and to recommend potential responses by Pre-Paid Legal's management.
Keywords: Financial Management; Financial Strategy; Salesforce Management; Marketing Strategy; Accrual Accounting; Business Cycles; Forecasting and Prediction; Insurance; Business Growth and Maturation; Insurance Industry;
Healy, Paul M., and Jacob Cohen. "Pre-Paid Legal Services, Inc." Harvard Business School Case 100-037, November 1999. (Revised July 2003.) View Details
Case | HBS Case Collection | April 2003 (Revised May 2003)
Valuation Ratios in the Airline Industry
Four firms in the airline industry illustrate the underlying differences in valuation multiples (price-earnings and price-to-book).
Keywords: Valuation; Activity Based Costing and Management; Accounting Audits; Air Transportation Industry;
Healy, Paul M., Krishna G. Palepu, and Jonathan Barnett. "Valuation Ratios in the Airline Industry." Harvard Business School Case 103-002, April 2003. (Revised May 2003.) View Details
Case | HBS Case Collection | January 2003 (Revised May 2003)
Yahoo!'s Stock-Based Compensation (B)
Supplements the (A) case.
Keywords: Web Services Industry; Technology Industry;
Healy, Paul M., and Jacob Cohen. "Yahoo!'s Stock-Based Compensation (B)." Harvard Business School Case 103-043, January 2003. (Revised May 2003.) View Details
Yahoo!'s Stock-Based Compensation (C)
Healy, Paul M., and Jacob Cohen. "Yahoo!'s Stock-Based Compensation (C)." Harvard Business School Case 103-044, January 2003. (Revised May 2003.) View Details
Yahoo!'s Stock-Based Compensation (D)
Healy, Paul M., and Jacob Cohen. "Yahoo!'s Stock-Based Compensation (D)." Harvard Business School Case 103-045, January 2003. (Revised May 2003.) View Details
Case | HBS Case Collection | July 2002 (Revised April 2003)
Computer Associates International, Inc.: Governance and Investor Communication Challenge
Sanjay Kumar, the CEO of Computer Associates, faces investor communication challenges following the company's implementation of a new business model and the accompanying change method used to recognize revenue. Despite management's confidence that the new business model is working effectively, the firm's stock price falls significantly and a major shareholder challenges management through a proxy contest.
Keywords: Business Earnings; Earnings Management; Stock Shares; Problems and Challenges; Communication Strategy; Accrual Accounting; Business Model; Budgets and Budgeting; Corporate Governance; Revenue; Computer Industry; Information Technology Industry;
Healy, Paul M., and Krishna G. Palepu. "Computer Associates International, Inc.: Governance and Investor Communication Challenge." Harvard Business School Case 103-007, July 2002. (Revised April 2003.) View Details
Case | HBS Case Collection | November 2000 (Revised January 2003)
Yahoo!'s Stock-Based Compensation
Amy Maislos, an investor in Internet and technology companies, was excited to read that Yahoo! had reported a positive net income for 1998 operations. During the late 1990s, stock prices of Internet companies had risen rapidly even though most companies were reporting losses. Amy believed that investors and Wall Street analysts would soon expect profits from tech companies. When she reviewed the annual report she noticed a compensation footnote that reported that if Yahoo! had booked an expense for stock options, the company would have experienced a loss for 1998 operations.
Keywords: Stock Options; Online Technology; Financial Statements; Corporate Disclosure; Business Earnings; Earnings Management; Information Technology Industry;
Healy, Paul M., and Jacob Cohen. "Yahoo!'s Stock-Based Compensation." Harvard Business School Case 101-059, November 2000. (Revised January 2003.) View Details
Teaching Note | HBS Case Collection | February 2000 (Revised September 2002)
Pre-Paid Legal Services, Inc. TN
Keywords: Insurance Industry;
Healy, Paul M. "Pre-Paid Legal Services, Inc. TN." Harvard Business School Teaching Note 100-082, February 2000. (Revised September 2002.) View Details
Exercise | September 2000 (Revised January 2002)
Inventory Exercises
Introduces students to the concepts of inventory valuation (LIFO and FIFO) using a simple example. They then get the chance to apply this knowledge to help understand the inventory footnote for California Steel Industries.
Keywords: Logistics;
Healy, Paul M. "Inventory Exercises." Harvard Business School Exercise 101-012, September 2000. (Revised January 2002.) View Details
Background Note | HBS Case Collection | August 2000 (Revised November 2001)
Liability Reporting
Paul M. Healy and Preeti Choudhary
By examining key criteria for recognizing a liability, this case explores liability recognition in straightforward situations and then examines the most difficult reporting issues in recording liabilities. These often arise when: 1) uncertainty arises about whether an obligation has been incurred; or 2) measuring the value of the obligation is difficult.
Keywords: Financial Reporting; Legal Liability; Valuation; Problems and Challenges; Accounting Industry;
Healy, Paul M., and Preeti Choudhary. "Liability Reporting." Harvard Business School Background Note 101-016, August 2000. (Revised November 2001.) View Details
Background Note | HBS Case Collection | September 2001
Financial Reporting Environment, The
Paul M. Healy, Amy P. Hutton, Robert S. Kaplan and Krishna G. Palepu
Provides a framework for understanding the role of financial reporting and various intermediaries as mechanisms for reducing both adverse selection and moral hazard problems in capital markets. Financial reports reduce adverse selection by providing basic information for investors and their agents before they make initial capital resource allocation decisions. Subsequently, after capital is allocated to particular business ventures, financial reports reduce moral hazard between managers and investors by supplying information used in contracting between investors and managers to reduce conflicts of interests. Various institutional mechanisms and information intermediaries monitor and limit the manipulation of reported information by managers and constrain managers' ability to act in their own self-interest, rather than investors' interests. They also improve information production, reduce incentive conflicts, and enable capital markets to function effectively and efficiently, channeling the economy's savings to the most productive opportunities.
Keywords: Financial Reporting; Financial Statements; Capital Markets; Venture Capital; Corporate Disclosure; Conflict of Interests;
Healy, Paul M., Amy P. Hutton, Robert S. Kaplan, and Krishna G. Palepu. "Financial Reporting Environment, The." Harvard Business School Background Note 102-029, September 2001. View Details
Boeing Company's Accounting for Executive Stock Compensation, The
Keywords: United States;
Healy, Paul M. "Boeing Company's Accounting for Executive Stock Compensation, The." Harvard Business School Teaching Note 101-088, April 2001. View Details
Reporting Income for Dot-coms TN
Keywords: Web Services Industry;
Healy, Paul M. "Reporting Income for Dot-coms TN." Harvard Business School Teaching Note 101-086, March 2001. View Details
Background Note | HBS Case Collection | August 2000 (Revised February 2001)
This case discusses revenue recognition in straightforward situations and then considers revenue transactions that may be more complex to record. Revenue recognition criteria can be implemented for the following situations: 1) Customers pay prior to delivery; 2) Products/services are provided over multiple years; 3) Credit-worthiness of the customer is questionable; and 4) Money-back guarantees are offered.
Keywords: Business Earnings; Revenue Recognition; Decision Making; Financial Statements;
Healy, Paul M. "Revenue Recognition." Harvard Business School Background Note 101-017, August 2000. (Revised February 2001.) View Details
Expense Recognition
Recording expenses is not often clear-cut and can require considerable management judgment. This case discusses expense recognition in straightforward situations and then considers expense transactions that may be more complex to record. It uses examples that include situations in which: 1) The value of resources consumed is difficult to define; 2) Resources provide benefits for multiple years; 3) Resources are consumed, but the timing and amount of future payments is uncertain; and 4) Unused resources have declined in value.
Keywords: Accounting; Cost; Financial Statements;
Healy, Paul M., and Preeti Choudhary. "Expense Recognition." Harvard Business School Background Note 101-015, August 2000. (Revised February 2001.) View Details
Background Note | HBS Case Collection | August 2000 (Revised January 2001)
Asset Reporting
Using historical cost and conservatism to identify and value assets, this case explains the criteria for asset reporting in straightforward situations and then examines scenarios where implementing the criteria for recognition and valuation of assets is conceptually challenging. These more complex situations occur when: 1) Ownership or control of a resource is uncertain; 2) The economic benefits from outlays are uncertain or difficult to quantify; or 3) Resource values have changed.
Keywords: Accounting; Assets; Problems and Challenges; Accounting Industry;
Healy, Paul M., and Preeti Choudhary. "Asset Reporting." Harvard Business School Background Note 101-014, August 2000. (Revised January 2001.) View Details
Reporting Income for Dot-Coms
Dot-coms provide unique financial reporting situations.
Keywords: Financial Reporting; Capital; Revenue; Web Sites; Web Services Industry;
Healy, Paul M. "Reporting Income for Dot-Coms." Harvard Business School Background Note 101-013, August 2000. (Revised January 2001.) View Details
Case | HBS Case Collection | September 1999 (Revised December 2000)
Executive stock options are experiencing increased use and the Financial Accounting Standards Board is proposing changes in accounting in the United States.
Keywords: Executive Compensation; Stock Options; Financial Reporting; United States;
Healy, Paul M., and Jacob Cohen. "Boeing Company's Accounting for Executive Stock Compensation, The." Harvard Business School Case 100-031, September 1999. (Revised December 2000.) View Details
Background Note | HBS Case Collection | August 2000 (Revised October 2000)
Accounting for Mergers & Acquisitions
Discusses merger and acquisition accounting.
Keywords: Mergers and Acquisitions; Accounting;
Healy, Paul M., and Jacob Cohen. "Accounting for Mergers & Acquisitions." Harvard Business School Background Note 101-021, August 2000. (Revised October 2000.) View Details
Off-Balance Sheet Leases in the Restaurant Industry
Amy P. Hutton, Paul M. Healy and Jacob Cohen
Amid mounting concern by credit agencies about off-balance sheet liabilities, an analyst for one of the leading credit-rating agencies has been asked to make a presentation about off-balance sheet liabilities, the strategic analysis behind leasing versus purchasing property, and accounting for leases.
Keywords: Fair Value Accounting; Property; Leasing; Financial Statements; Capital Structure; Credit; Financial Services Industry;
Hutton, Amy P., Paul M. Healy, and Jacob Cohen. "Off-Balance Sheet Leases in the Restaurant Industry." Harvard Business School Case 101-033, October 2000. (Revised October 2000.) View Details
MCI-WorldCom Combination, The (A)
Outlines the accounting decision faced by WorldCom in its acquisition of MCI. Two methods are discussed (purchase and pooling) and students are asked to evaluate which would be more suitable for WorldCom.
Keywords: Mergers and Acquisitions; Accounting; Telecommunications Industry;
Healy, Paul M., and Jacob Cohen. "MCI-WorldCom Combination, The (A)." Harvard Business School Case 101-027, September 2000. View Details
MCI-WorldCom Combination, The (B)
Healy, Paul M., and Jacob Cohen. "MCI-WorldCom Combination, The (B)." Harvard Business School Case 101-028, September 2000. View Details
Financial Statement and Ratio Analysis
Prepares students for financial ratio analysis.
Keywords: Business Education; Financial Statements; Theory;
Healy, Paul M., and Jacob Cohen. "Financial Statement and Ratio Analysis." Harvard Business School Background Note 101-029, September 2000. View Details
Aerospace Technologies, Inc.
Ben Galil's privately held engineering consulting firm represents aerospace products manufacturers in Israeli government biddings. The company incurs expenses for years before getting paid. This case deals with the alternative methods for booking revenues and expenses (i.e., cash and accrual accounting). It examines whether the company is profitable and whether its current commission structure is sound.
Keywords: Accrual Accounting; Accounting; Revenue; Cost; Business or Company Management; Profit; Engineering; Bids and Bidding; Government and Politics; Private Ownership; Consulting Industry; Israel;
Healy, Paul M., and Jacob Cohen. "Aerospace Technologies, Inc." Harvard Business School Case 101-003, July 2000. View Details
City of New York, The
This case examines the economics of a municipality, and then explores its financial position from the perspective of a bond rating firm.
Keywords: Bonds; Financial Management; Public Sector; City; Financial Statements; Government Administration;
Healy, Paul M. "City of New York, The." Harvard Business School Case 198-030, May 1998. (Revised April 2000.) View Details
Case | HBS Case Collection | September 1997 (Revised March 2000)
Adelphia Communications Corporation
A bank officer must make a loan application decision for a large but financially troubled cable broadcaster.
Keywords: Financial Condition; Financing and Loans; Decision Choices and Conditions; Contracts; Telecommunications Industry;
Healy, Paul M. "Adelphia Communications Corporation." Harvard Business School Case 198-031, September 1997. (Revised March 2000.) View Details
Adelphia Communications Corporation TN
Keywords: Telecommunications Industry;
Healy, Paul M. "Adelphia Communications Corporation TN." Harvard Business School Teaching Note 100-086, February 2000. View Details
Case | HBS Case Collection | December 1999
Brierley Investments Limited
Brierley's is an investment company that has performed poorly in the New Zealand market. Management has prepared a report of the intrinsic value of the company's investments.
Keywords: Valuation; Corporate Disclosure; Financial Strategy; Management Analysis, Tools, and Techniques; Performance Evaluation; Investment; Business Strategy; Financial Services Industry; New Zealand;
Healy, Paul M. "Brierley Investments Limited." Harvard Business School Case 100-014, December 1999. View Details
Thermo Electron Corporation: Financial Analysis
Paul M. Healy and Souren G. Ouzounian
Healy, Paul M., and Souren G. Ouzounian. "Thermo Electron Corporation: Financial Analysis." Harvard Business School Case 100-057, November 1999. View Details
Background Note | HBS Case Collection | October 1999
Emergence of an International Accounting Standards Setter, The
Provides students with an overview of recent developments in the setting of accounting standards at a global level.
Keywords: International Accounting; Financial Statements; Globalization;
Healy, Paul M., and Jacob Cohen. "Emergence of an International Accounting Standards Setter, The." Harvard Business School Background Note 100-046, October 1999. View Details
Case | HBS Case Collection | September 1997 (Revised August 1999)
Boston Chicken, Inc.
This case examines Boston Chicken's franchise strategy for growing its innovative restaurant business, and the associated accounting reporting issues that arise.
Keywords: Financial Reporting; Franchise Ownership; Financial Strategy; Business Strategy; Food and Beverage Industry;
Healy, Paul M. "Boston Chicken, Inc." Harvard Business School Case 198-032, September 1997. (Revised August 1999.) View Details
Case | HBS Case Collection | October 1998 (Revised January 1999)
Echlin vs. SPX
Paul M. Healy, Bjorn N. Jorgensen and Penny Joseph
Echlin has received a hostile takeover offer from SPX. Both companies have been undertaking major restructurings, and Echlin's shareholders face a difficult decision of whether to support current management or sell out to SPX. Students are asked to analyze the two companies and prepare letters explaining their positions from the CEOs of both companies to be sent to Echlin's shareholders
Keywords: Acquisition; Financial Statements; Business and Shareholder Relations;
Healy, Paul M., Bjorn N. Jorgensen, and Penny Joseph. "Echlin vs. SPX." Harvard Business School Case 199-010, October 1998. (Revised January 1999.) View Details
Case | HBS Case Collection | February 1992 (Revised October 1996)
CUC International, Inc. (A)
The case series examines the role of financial reporting and corporate finance policies as vehicles for communication between managers and outside investors. This case describes management's concern that the company's stock is undervalued because analysts viewed the company's accounting as aggressive. Students are asked to advise CUC's management on ways to improve investor confidence.
Keywords: Financial Reporting; Stocks; Financial Management; Decisions; Economic Slowdown and Stagnation; Management Style; Management Practices and Processes; Business and Shareholder Relations; Value; Financial Services Industry;
Palepu, Krishna G., and Paul M. Healy. "CUC International, Inc. (A)." Harvard Business School Case 192-099, February 1992. (Revised October 1996.) View Details
Supplement | HBS Case Collection | February 1992 (Revised May 1995)
CUC International, Inc. (B)
Describes CUC's initial response to investors' concerns about the firm's accounting. Students are asked to evaluate this response.
Keywords: Financial Reporting; Business and Shareholder Relations;
Palepu, Krishna G., and Paul M. Healy. "CUC International, Inc. (B)." Harvard Business School Supplement 192-100, February 1992. (Revised May 1995.) View Details
CUC International, Inc. (C)
Describes analysts' and investors' reaction to CUC's initial response.
Palepu, Krishna G., and Paul M. Healy. "CUC International, Inc. (C)." Harvard Business School Supplement 192-101, February 1992. (Revised May 1995.) View Details
by Paul M. Healy
Wall Street research helps to support a well-functioning capital market by providing investors with information about investment opportunities, and corporate issuers with liquidity for their stocks. Yet surprisingly little is known about how Wall Street research actually works. Academic research has focused on analysts' earnings forecasts and stock recommendations, although investors appear to put little stock in this summary data. Regulators have focused on concerns about analysts' conflicts of interest that diminish the quality and integrity of analyst research. My research provides greater insights into how analysts perform their role as information intermediaries, how they are managed and rewarded, and how they really perform.
Keywords: sell-side analysts; brokerage; investment banking; buy-side analysts; compensation; Financial Services Industry;
World Bank estimates indicate that as much as $1 trillion is paid in bribes throughout the world in a given year. Corruption has been shown to slow economic development. My research focuses on how corruption affects multinational companies. It discusses differences in companies' commitments to fighting corruption and their implications for performance, as well as providing greater understanding for how companies become involved in corruption and the consequences of getting caught.
Keywords: corruption; Internal governance;
Teaching Interest
Leadership in Financial Organizations
In the wake of the recent global economic crisis, financial organizations are confronted with volatile financial markets, heightened regulation, and increased public scrutiny of both performance and ethics. this course explores industry-specific subjects related to leadership, change management, ethics, and talent management, and is designed to help leaders of financial organizations navigate the difficult economic and regulatory climate. The course is offered in four of the world's leading financial centers.
Keywords: Financial Markets; regulation; management; ethical behavior; ethics; Ethical Judgment; talent management; global; financial institutions; Management; Finance; Investment Banking; Financial Institutions; Talent and Talent Management; Ethics;
Related Link: Executive Education LFO
Strategic Financial Analysis
This course focuses on the tools used to create economic value. It presents frameworks for assessing strategy, monitoring performance, forecasting capital utilization, valuing strategic assets, and reviewing restructuring opportunities. Participants learn to apply rigorous financial analysis as they evaluate business performance, weigh potential acquisitions, and assess global competition.
Keywords: strategic change; restructuring; Restructuring; Strategy;
Related Link: http://www.exed.hbs.edu/programs/sfa/Pages/default.aspx
Financial Reporting and Control
Throughout their careers, business leaders are required to measure and evaluate their organization's economic performance, improve resource allocation and strategy implementation within their organizations, and build accountability for performance through effective external and internal governance. Top leadership in most organizations must also communicate performance information to external investors and other capital providers to ensure that their organizations are able to access capital on favorable terms. This course provides students with key concepts and frameworks that guide the effective design and use of performance measurement systems to accomplish these multiple complex goals.
Related Link: https://inside.hbs.edu/Departments/mba/academics/courses/Pages/rc_term_i.aspx
Leadership and Corporate Accountability
This course focuses on the responsibilities of companies, their leaders, and their boards. Its aim is to deepend students' understanding of the economic, legal, and ethical dimensions of these responsibilities and to provide practical guidance on driving performance that delivers on all three dimensions. These situations have the potential to define, for good and bad, the careers of executives involved, and to determine the sustainability of their firms. Through a series of difficult dilemmas set in different regions of the world, the course builds a framework for decision-making and explores the elements of effective governance.
Related Link: http://www.exed.hbs.edu/assets/Pages/video.aspx?videoid=1227
Audit Committees in a New Era of Governance
The last ten years has heightened demands on audit committees. Not only are they responsible for overseeing internal and external audits to ensure that investors receive accurate and transparent information, but they must ensure compliance with new accounting and regulatory rules and standards. This intensive program prepares audit committee members and chief financial officers to operate effectively in this new environment.
Related Link: http://www.exed.hbs.edu/programs/ac/Pages/default.aspx
Awarded an Honorary Doctorate in 2013 by the University of Turku (Turun yliopisto) in Finland.
Winner of the second place 2013 Hermes Fund Managers' Best Paper Prize for the paper "Causes and Consequences of Firm Disclosures of Anticorruption Efforts" (with George Serafeim, Harvard Business School Working Paper, No. 12–077, 2012).
Honored in 2013 as a Fellow of the New Zealand Institute of Chartered Accountants for outstanding contributions to the profession of accountancy.
Winner of the 2006 Emerald Management Reviews Citation of Excellence for "Which Types of Analyst Firms Are More Optimistic?" (with Amanda Paige Cowen and Boris Groysberg, Journal of Accounting & Economics, April 2006).
Winner of the 2001 All Star Paper Award from the Journal of Financial Economics for "Does Corporate Performance Improve after Mergers?" (April 1992) with Krishna G. Palepu and Richard S. Ruback.
Business Analysis and Valuation Using Financial Statements (South-Western College Publishing, 1996), with Victor L. Bernard and Krishna G. Palepu, won the 1999 American Accounting Association Notable Contributions to Accounting Literature Award.
Recipient of the MIT Sloan School of Management Outstanding Teacher Award in 1997. Also a recipient of this award in 1991 and 1992.
Business Analysis and Valuation Using Financial Statements (South-Western College Publishing, 1996), with Victor L. Bernard and Krishna G. Palepu, won the 1997 Wildman Medal from the American Accounting Association.
Winner of the 1990 American Accounting Association Notable Contribution Award for the article "The Effect of Bonus Schemes on Accounting Decisions" (Journal of Accounting & Economics, April 1985).
Additional Information (Links)
Krishna Palepu
Boris Groysberg
Karthik Ramanna
George Serafeim
Working Knowledge
Articles, Working papers, More
accounting industry