The Beguiling Behaviour of Narcissistic CEOs: Evidence from Repurchase Announcements

45 Pages Posted: 2 Feb 2023

See all articles by Evans Ofosu Boamah

Evans Ofosu Boamah

University of Warwick - Warwick Business School

Shantanu Banerjee

Lancaster University - Department of Accounting and Finance; Lancaster University - Management School

Date Written: January 21, 2023

Abstract

We study whether CEO narcissism affects a firm’s share repurchase announcements and their implementations. Using signature characteristics as a measure of narcissism, we find that US firms with narcissist CEOs are more likely to make repurchase announcements and announce higher repurchase dollar amounts. However, these firms are less likely to follow through. They repurchase less and a small dollar amount when they make an actual repurchase in the announcement year. The higher rate and amount of repurchase announcements are more pronounced in poorly-governed firms with narcissistic CEOs. These results are robust to various specifications including a difference-in-difference specification using CEOs’ exogenous turnover, controlling for other CEO traits and using an alternative measure of narcissism based on pronoun usage in CEO communications. Collectively, the results presented in this study demonstrate that narcissist CEOs play a critical role in the intensity of share repurchase announcements and their executions, particularly for firms with weaker governance structure.

Keywords: CEO Narcissism, share repurchases, CEO duality, price trends

JEL Classification: G35, G34, M40

Suggested Citation

Boamah, Evans Ofosu and Banerjee, Shantanu and Banerjee, Shantanu, The Beguiling Behaviour of Narcissistic CEOs: Evidence from Repurchase Announcements (January 21, 2023). Available at SSRN: https://ssrn.com/abstract=4333314 or http://dx.doi.org/10.2139/ssrn.4333314

Evans Ofosu Boamah (Contact Author)

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Shantanu Banerjee

Lancaster University - Management School ( email )

Lancaster, Lancashire LA1 4YX
United Kingdom

Lancaster University - Department of Accounting and Finance ( email )

Lancaster, Lancashire LA1 4YX
United Kingdom

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