CEO Narcissism, Human Capital, and Firm Value

72 Pages Posted: 29 Jul 2018 Last revised: 14 Jul 2020

See all articles by Shane A. Johnson

Shane A. Johnson

Texas A&M University - Department of Finance

Adam C. Kolasinski

Texas A&M University - Department of Finance

James Nordlund

Louisiana State University

Date Written: August 21, 2018

Abstract

Firms with narcissistic CEOs are more likely to experience the turnover of non-CEO executives; this effect is amplified for executives with pay closer to the CEO’s pay. Stock price reactions to narcissism-induced departures are more negative the longer the non-CEO executive’s tenure. If long-tenured non-CEO executives have more valuable human capital, the results imply a relation between CEO narcissism and the loss of valuable human capital. We find parallel results for mass layoffs of non-executive, rank-and-file employees. Our findings imply that CEO narcissism impacts firm value through its effect on the retention of valuable human capital.

Keywords: narcissism, executives, turnover, layoffs, human capital, behavioral finance

JEL Classification: M12, M51, M54, G40

Suggested Citation

Johnson, Shane A. and Kolasinski, Adam C. and Nordlund, James, CEO Narcissism, Human Capital, and Firm Value (August 21, 2018). Mays Business School Research Paper No. 3209882, Available at SSRN: https://ssrn.com/abstract=3209882 or http://dx.doi.org/10.2139/ssrn.3209882

Shane A. Johnson (Contact Author)

Texas A&M University - Department of Finance ( email )

Mays School of Business
College Station, TX 77843-4218
United States
979-862-3318 (Phone)

Adam C. Kolasinski

Texas A&M University - Department of Finance ( email )

360 Wehner
College Station, TX 77843-4218
United States

James Nordlund

Louisiana State University ( email )

2163 CEBA
Baton Rouge, LA 70803
United States

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