Abstract

http://ssrn.com/abstract=2144419
 


 



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


Charles (Chad) Ham


Washington University in Saint Louis - John M. Olin Business School

Nicholas Seybert


University of Maryland - Department of Accounting & Information Assurance

Sean Wang


University of North Carolina - Kenan-Flagler Business School

2014

UNC Kenan-Flagler Research Paper No. 2013-1

Abstract:     
Using the size of CEO signatures in SEC filings to measure individual narcissism, we find that it is associated with several negative firm outcomes. We first validate signature size as a measure of narcissism in a laboratory experiment. We then use CEO signatures to study the relation between CEO narcissism, the firm’s investment policies, and firm performance. CEO narcissism is associated with overinvestment, particularly in the form of R&D and M&A expenditures, but not capital expenditures. Firms led by narcissistic CEOs are associated with lower innovative productivity in the form of patents and lower financial productivity in the form of profitability and operating cash flows. Despite this negative performance, narcissistic CEOs enjoy higher absolute and relative compensation. Using an options-based measure of overconfidence, we document our results are not driven by CEO overconfidence.

Keywords: CEO narcissism, signature size, firm investment, firm performance, CEO compensation

JEL Classification: M10, M40, G30


Not Available For Download

Date posted: September 10, 2012 ; Last revised: March 22, 2016

Suggested Citation

Ham, Charles (Chad) and Seybert, Nicholas and Wang, Sean, Narcissism Is a Bad Sign: CEO Signature Size, Investment, and Performance (2014). 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
Washington University in Saint Louis - John M. Olin Business School ( email )
One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
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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