Beauty is Wealth: CEO Appearance and Shareholder Value
79 Pages Posted: 21 Nov 2013 Last revised: 20 Dec 2014
Date Written: December 19, 2014
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: Suggested Citation