Abstract

http://ssrn.com/abstract=2144419
 


 



Narcissism is a Bad Sign: CEO Signature Size, Investment, and Performance


Charles Ham


University of Maryland - Department of Accounting & Information Assurance

Nicholas Seybert


University of Maryland - Department of Accounting & Information Assurance

Sean Wang


University of North Carolina - Kenan-Flagler Business School

December 16, 2013

UNC Kenan-Flagler Research Paper No. 2013-1

Abstract:     
Using the size of the CEO signature on annual SEC filings to measure CEO narcissism (a
link which we first validate in a laboratory study), we find that narcissism is positively associated
with several measures of firm overinvestment, yet lower patent count and patent citation
frequency. Abnormally high investment by narcissists predicts lower future revenues and lower
sales growth. Narcissistic CEOs also deliver worse current performance as measured by return
on assets, particularly for firms in early life-cycle stages and with uncertain operating
environments, where a CEO’s decisions are most likely to impact the firm’s future value. Despite
these negative performance indicators, more narcissistic CEOs enjoy higher compensation, both
unconditionally and relative to the next highest paid executive at their firm.

Number of Pages in PDF File: 44

Keywords: narcissism, CEO, investment, performance, return on assets, stock price, compensation, manipulation, psychology

JEL Classification: M10, M40, G30

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Date posted: September 10, 2012 ; Last revised: December 18, 2013

Suggested Citation

Ham, Charles and Seybert, Nicholas and Wang, Sean, Narcissism is a Bad Sign: CEO Signature Size, Investment, and Performance (December 16, 2013). UNC Kenan-Flagler Research Paper No. 2013-1. Available at SSRN: http://ssrn.com/abstract=2144419 or http://dx.doi.org/10.2139/ssrn.2144419

Contact Information

Charles Ham
University of Maryland - Department of Accounting & Information Assurance ( email )
Robert H. Smith School of Business
College Park, MD 20742-9157
United States
Nicholas Seybert (Contact Author)
University of Maryland - Department of Accounting & Information Assurance ( email )
Robert H. Smith School of Business
College Park, MD 20742-9157
United States
Sean Wang
University of North Carolina - Kenan-Flagler Business School ( email )
McColl Building
Chapel Hill, NC 27599-3490
United States

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