The Face of Risk: CEO Facial Masculinity and Firm Risk

32 Pages Posted: 6 Mar 2019

See all articles by Shinichi Kamiya

Shinichi Kamiya

Nanyang Technological University (NTU) - Nanyang Business School

Y. Han (Andy) Kim

Sungkyunkwan University

Soohyun Park

Sungkyunkwan University, School of Business Administration, Students

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Date Written: March 2019

Abstract

We examine whether a male CEO's facial masculinity, measured by facial width‐to‐height ratio (fWHR), predicts the riskiness of his firm. Using the face pictures of 1,162 CEOs in the Execucomp database, we find supporting evidence. Firms with more masculine‐faced CEOs have higher stock return volatility and higher financial leverage and are more acquisitive. Their frequency of acquisitions, the dollar amount spent on acquisitions, and the takeover premium are all higher. We find that more masculine‐faced CEOs’ compensation is more sensitive to the risk of the firm. The result is robust when we use AI (artificial intelligence)‐measured fWHR of the CEOs.

Keywords: CEO, fWHR, leverage, M&A, masculinity, risk, testosterone, VEGA

Suggested Citation

Kamiya, Shinichi and Kim, Y. Han (Andy) and Park, Soohyun, The Face of Risk: CEO Facial Masculinity and Firm Risk (March 2019). European Financial Management, Vol. 25, Issue 2, pp. 239-270, 2019, Available at SSRN: https://ssrn.com/abstract=3346003 or http://dx.doi.org/10.1111/eufm.12175

Shinichi Kamiya (Contact Author)

Nanyang Technological University (NTU) - Nanyang Business School ( email )

Singapore, 639798
Singapore

Y. Han (Andy) Kim

Sungkyunkwan University ( email )

422 School of Business
25-2 SungKyunKwan-Ro, Jongno-ju
Seoul, 110-745
Korea, Republic of (South Korea)
+82-2-760-0622 (Phone)
+82-2-760-0622 (Fax)

HOME PAGE: http://https://sites.google.com/site/andyyhankim/

Soohyun Park

Sungkyunkwan University, School of Business Administration, Students ( email )

206 International Hall
Seoul 110-745
Korea, Republic of (South Korea)

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