Beauty is Wealth: CEO Appearance and Shareholder Value
Joseph Taylor Halford
University of Wisconsin Milwaukee
Scott H. C. Hsu
University of Wisconsin - Milwaukee
November 20, 2013
This paper examines whether and how the appearance of chief executives officers (CEOs) affects shareholder value. We obtain a Facial Attractiveness Index of 677 CEOs from the S&P 500 companies based on their facial geometry. CEOs with a higher Facial Attractiveness Index are associated with better stock returns around their first days on the job and higher acquirer returns upon acquisition announcements. To mitigate endogeneity concerns, we compare stock returns surrounding CEO television news events with stock returns surrounding a matched sample of news article events. CEOs’ Facial Attractiveness Index positively affects the stock returns on the television news date, but not around the news article date. The findings suggest that CEO appearance matters for shareholder value and provide an explanation why more attractive CEOs receive “beauty premiums” in their compensation.
Number of Pages in PDF File: 33
Keywords: CEO image, facial attractiveness, shareholder value, corporate news events
JEL Classification: G30, G34working papers series
Date posted: November 21, 2013 ; Last revised: December 5, 2013
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