Then-CEO Renaud Laplanche celebrates Lending Club's initial public offering at the New York Stock Exchange, Dec. 11, 2014. He has quit over improprieties stemming from the “tone at the top.” REUTERS/Brendan McDermid

Lending Club splashed onto public markets in 2014 with a promise of bringing West Coast disruption to the old guard of New York consumer lending. But two weeks into a company crisis sparked by managerial misconduct, the online lender has diagnosed itself with a decidedly Wall Street malady: “tone at the top.”

That’s how Lending Club explained the series of ill-fated decisions in its upper ranks that led to a federal investigation and the resignation of CEO Renaud Laplanche earlier this month, the company explained in new securities filings.

It’s not the first time this year that a major company has come down with a case of poor “tone at the top.” That was the same explanation given by directors at Valeant Pharmaceuticals for a series of accounting scandals and public controversies that sparked the ouster of CEO Michael Pearson in March.

“The tone at the top of the organization and the performance-based environment at the company, where challenging targets were set and achieving those targets was a key performance expectation, may have been contributing factors” in corporate improprieties, Valeant said in April.

Though there are innumerable differences between the two companies — one a Silicon Valley financial technology star, the other a deal-friendly drugmaker beloved by hedge funds — they share one quality in particular: aggressive bonus structures for top executives.

Laplanche — who resigned in part over an undisclosed stake in a company that did business with Lending Club — received most of his compensation through performance-linked bonuses. His biennial stock award, based in part on financial results, was $11 million in 2014. His 2015 base pay of $461,000 came with a $549,185 bonus, predicated on exceeding targets on two metrics: revenue and profitability.

They weren’t easy targets, either. “At the time these performance metrics were set, our compensation committee believed that the corporate performance metrics were challenging and aggressive,” the company stated in investor documents last month. “In order to reach target payouts, we would have had to achieve an exceptional year-over-year increase” in revenue and earnings, the documents stated.

The entirety of Laplanche’s annual bonus rested on these metrics; for the rest of the top management team, financial targets drove 75 percent of total bonus payouts.

In periods of smooth sailing, these demanding benchmarks might drive “effective management and a clear focus,” as the company suggested. But when market headwinds arise, the desire to hit difficult metrics incentivizes questionable behavior.

That was the case for Lending Club in the first months of 2016. After years of rapid growth, the company was hit by a marketwide capital markets squeeze in early 2016, drying up demand for its online consumer loans and threatening management’s ability to hit aggressive revenue targets.

That’s when Laplanche, 45, began pushing for a company investment in Cirrix Capital, a fund whose appetite for Lending Club loans could help make up for the lack of interest elsewhere, according to a Bloomberg report. It was only after the board of directors accepted Laplanche’s Cirrix plan that his personal stake in the fund was revealed.

In a separate finding, Lending Club was found to have misstated loan information for $22 million of loans sold to the investment bank Jefferies Group.

How much did the deteriorating “tone at the top” have to do with the quest to reach tough profit targets? It’s impossible to say with certainty, but scholarly research has shown that performance-based goals tend to increase unethical behavior and earnings manipulation at publicly traded companies.

For Laplanche, all it took was a couple of missteps to be shown the door, and he has expressed confidence in the ability of the company to rebound. “As difficult as it is to step away from the company and its people, LendingClub is in good hands,” he said in a statement.

At Valeant, meanwhile, the misconduct was reported to be much more widespread. The financial incentives were also far beyond what Laplanche could have seen. As company filings showed last month, Pearson could have won an unprecedented executive bonus had he hit a stock-based target. The potential payout: $2.66 billion.