Recent studies have shown that managers who undergo adverse professional experiences become more conservative in their financial policies. In this paper, we study how CEOs’ adverse professional experiences influence their decision-making on stakeholder management. We build on self-categorization theory and argue that CEOs’ previous employment experiences of financial distress induce them to avoid repeating similar situations and to adopt resource-conservation strategies that may consequentially hurt the interests of certain stakeholders such as the community and general public. We also argue that this effect is moderated by two factors that can influence CEOs’ self-categorization processes—firm financial performance and CEO positive emotion. Based on a sample of U.S. publicly listed firms over the 2003 to 2016 period, we find that adverse professional experience is negatively associated with corporate social responsibility and positively associated with tax avoidance. Further, these relationships are mitigated by better corporate financial performance and CEOs with higher positive emotion. Our study contributes to our understanding of stakeholder management strategies.