Narcissism is a Bad Sign: CEO Signature Size, Investment, and Performance
Charles (Chad) Ham
Washington University in Saint Louis - John M. Olin Business School
University of Maryland - Department of Accounting & Information Assurance
University of North Carolina - Kenan-Flagler Business School
June 1, 2014
UNC Kenan-Flagler Research Paper No. 2013-1
Using the size of CEO signatures in annual SEC filings to measure individual narcissism, we find that it predicts an array of negative outcomes. CEO narcissism predicts overinvestment, yet fewer patents and lower patent citation frequency. Investment by narcissists negatively predicts future sales and sales growth, and narcissists also deliver lower ROA, especially for firms in uncertain operating environments. Despite this negative performance, narcissistic CEOs enjoy higher compensation. Consistent with some firms realizing the dangers of narcissism, narcissists are more likely to be hired by mature, low-growth firms. In addition, narcissistic CEOs have shorter tenures, suggesting potential negative career consequences.
Number of Pages in PDF File: 53
Keywords: narcissism, CEO, investment, performance, return on assets, stock price, compensation, manipulation, psychology
JEL Classification: M10, M40, G30
Date posted: September 10, 2012 ; Last revised: March 19, 2015
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