CEOs' Perceived Personalities and Firm Policies: A Video-Based Analysis

Abstract

We study the relation between a CEO's perceived personality and firm policies. We hand-collect a comprehensive sample of 30-second video clips of CEOs of firms in the S&P 500 between 2006 and 2016. Using 1,620 videos of CEOs in an experiment setup including observer ratings, we then measure a CEO's perceived personality in terms of the Big Five traits: agreeableness, conscientiousness, extraversion, neuroticism, and openness to experience. We find that a CEO's perceived openness to experience is negatively associated with a firm's profitability, capital expenditures, and sales growth. Moreover, the perceived extraversion of a CEO is strongly associated with the number of firm acquisitions.

Keywords: CEO personality, Video Data, Big Five Traits, Firm performance

JEL Classification: G41, G30