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Narcissism is a Bad Sign: CEO Signature Size, Investment, and PerformanceCharles HamUniversity of Maryland - Department of Accounting & Information Assurance Nicholas SeybertUniversity of Maryland - Department of Accounting & Information Assurance Sean WangUniversity of North Carolina Kenan-Flagler Business School March 19, 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, 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: 43 Keywords: narcissism, CEO, investment, performance, return on assets, stock price, compensation, manipulation, psychology JEL Classification: M10, M40, G30 working papers seriesDate posted: September 10, 2012 ; Last revised: March 25, 2013Suggested CitationContact Information
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