Beauty is Wealth: CEO Appearance and Shareholder Value

79 Pages Posted: 21 Nov 2013 Last revised: 20 Dec 2014

Joseph Taylor Halford

University of Wisconsin Milwaukee

Scott H. C. Hsu

University of Arkansas - Department of Finance

Date Written: December 19, 2014

Abstract

This paper examines whether and how the appearance of chief executives officers (CEOs) relates to shareholder value. We obtain a Facial Attractiveness Index of 667 CEOs based on their facial geometry. CEOs with a higher Facial Attractiveness Index are associated with better returns around their job announcements, and higher acquirer returns upon acquisition announcements. To mitigate endogeneity concerns, we compare stock returns surrounding news dates with CEOs’ images to returns surrounding news dates without CEOs’ images. Facial Attractiveness Index positively affects returns only around news dates with CEOs’ images. These findings suggest that CEO appearance matters for shareholder value.

Keywords: CEO image, facial attractiveness, shareholder value, corporate news events

JEL Classification: G30, G34

Suggested Citation

Halford, Joseph Taylor and Hsu, Scott H. C., Beauty is Wealth: CEO Appearance and Shareholder Value (December 19, 2014). Available at SSRN: https://ssrn.com/abstract=2357756 or http://dx.doi.org/10.2139/ssrn.2357756

Joseph Taylor Halford

University of Wisconsin Milwaukee ( email )

3203 N Maryland Ave
Sheldon B Lubar School of Business
Milwuakee, WI 53211
United States

Scott H. C. Hsu (Contact Author)

University of Arkansas - Department of Finance ( email )

Fayetteville, AR 72701
United States

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