A Corporate Beauty Contest

25 Pages Posted: 19 Apr 2010 Last revised: 10 Oct 2010

See all articles by John R. Graham

John R. Graham

Duke University; National Bureau of Economic Research (NBER)

Campbell R. Harvey

Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative

Manju Puri

Duke University - Fuqua School of Business; NBER; FDIC

Multiple version iconThere are 2 versions of this paper

Date Written: April 2010

Abstract

We conduct beauty contest experiments, using close to 2,000 subjects to study the facial traits of CEOs. In one experiment we use pairs of photographs and find that subjects rate CEO faces as appearing more "competent" and less "likable" than non-CEO faces. Another experiment matches CEOs from large firms against CEOs from smaller firms and finds large-firm CEOs look more competent and likable. In a third experiment, subjects numerically rate the facial traits of CEOs. We find that executive compensation is linked to these perceived "competence" ratings. Our analysis explores these findings in more detail and shows that the facial-trait rating can be explained by a quantitative scoring of the "maturity" or "baby-facedness" of the CEO. That is, more mature looking CEOs are assigned higher "competence" scores. This finding is potentially worrisome because psychology research shows that baby-faced-looking people often possess qualities opposite to those projected by their facial traits. Accordingly, we find no evidence that the firms of competent looking CEOs perform better. Essentially, the "look" of competence says very little about effective competence.

Suggested Citation

Graham, John Robert and Harvey, Campbell R. and Puri, Manju, A Corporate Beauty Contest (April 2010). NBER Working Paper No. w15906. Available at SSRN: https://ssrn.com/abstract=1590716

John Robert Graham (Contact Author)

Duke University ( email )

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National Bureau of Economic Research (NBER)

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Campbell R. Harvey

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
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919-660-7768 (Phone)
919-660-8030 (Fax)

National Bureau of Economic Research (NBER)

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United States

Duke Innovation & Entrepreneurship Initiative ( email )

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Durham, NC 27701
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Manju Puri

Duke University - Fuqua School of Business ( email )

100 Fuqua Drive
Box 90120
Durham, NC 27708-0120
United States
919-660-7657 (Phone)

NBER

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

FDIC ( email )

550 17th Street NW
Washington, DC 20429
United States

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