I dont know if to take this one seriously, but it would appear that good looking CEOs will not only receive higher compensation, but will deliver better returns on their first days on the job and boost stock performance when they appear on T.V, according to research by two economists at the University of Wisconsin. Exploring the theme, Joseph Halford and Hung-Chia Hsu, discovered a positive correlation between a company’s stock performance and their CEO’s “facial geometry”. The research titled Beauty is Wealth: CEO Appearance and Shareholder Value tracks 677 CEOs from companies in the S&P500 index. My first instinctive reaction is, should people deemed to be better looking have certain advantages over others?
“Attractiveness has a positive and significant impact on stock returns surrounding the first day when the CEO is on the job, indicating that shareholders seem to perceive more attractive CEOs to be more valuable,” the paper states. In an interview with CNBC, Halford and Hsu highlighted Marissa Mayer Yahoo’s CEO, as a good example, based on their report. “She scored 8.45 (out of 10) in our facial attractiveness index and is among the top 5 percent (best-looking) in our sample,” they wrote. “Yahoo has been doing well since she became the CEO”.
Do they have a point?, check out the Huffington Post’s take on this:
“This comes as the British business scene has seen Canadian “rockstar” Mark Carney take over as governor of the Bank of England, who is on a £874,000 salary, and has been praised for his “George Clooney” good looks. Meanwhile, new Reserve Bank of India governor Raghuram Rajan been praised as a “sex symbol” with an “unbearable hotness”.
Right… So should your board go on the hunt to find more ‘hot’ and attractive CEOs?
“Our results do not suggest that, when searching for CEOs, firms should only look at appearance without considering other abilities,” Halford and Hsu wrote.”On the other hand, for firms that rely more on the negotiation and visibility aspects, maybe they should place more weight on appearance when searching for CEOs.”
Hayden Richards is Contributor of IntelligentHQ. He specialises in finance, trading, investment, and technology, with expertise in both buy-side, sell-side. Contributing and advising various global corporations, Hayden is a thought leader, researching on global regulatory subjects, digital, social media strategies and new trends for Businesses, Capital Markets and Financial Services.
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