IDEAS home Printed from https://ideas.repec.org/p/cdl/indrel/qt6dt7p2pm.html
   My bibliography  Save this paper

Narcissistic CEOs and Executive Compensation

Author

Listed:
  • O'Reilly, Charles A. III
  • Doerr, Bernadette
  • Caldwell, David F.
  • Chatman, Jennifer A.

Abstract

Narcissism is characterized by traits such as dominance, self-confidence, a sense ofentitlement, grandiosity, and low empathy. There is growing evidence that individuals with these characteristics often emerge as leaders, and that narcissistic CEOs may make more impulsive and risky decisions. We suggest that these tendencies may also affect how compensation is allocatedamong top management teams. Using employee ratings of personality for the CEOs of 32 prominent high-technology firms, we investigate whether more narcissistic CEO’s have compensation packages that are systematically different from their less narcissistic peers and specifically whether these differences increase the longer the CEO stays with the firm. As predicted, we find that more narcissistic CEOs who have been with their firm longer receive more total direct compensation (salary, bonus, stock options), have more money in their totalshareholdings, and have larger discrepancies between their own (higher) compensation and the other members of their team.

Suggested Citation

  • O'Reilly, Charles A. III & Doerr, Bernadette & Caldwell, David F. & Chatman, Jennifer A., 2013. "Narcissistic CEOs and Executive Compensation," Institute for Research on Labor and Employment, Working Paper Series qt6dt7p2pm, Institute of Industrial Relations, UC Berkeley.
  • Handle: RePEc:cdl:indrel:qt6dt7p2pm
    as

    Download full text from publisher

    File URL: http://www.escholarship.org/uc/item/6dt7p2pm.pdf;origin=repeccitec
    Download Restriction: no

    References listed on IDEAS

    as
    1. James B. Wade & Charles A. O'Reilly & Timothy G. Pollock, 2006. "Overpaid CEOs and Underpaid Managers: Fairness and Executive Compensation," Organization Science, INFORMS, vol. 17(5), pages 527-544, October.
    2. Charles A. O'Reilly & Brian G. M. Main, 2010. "Economic and psychological perspectives on CEO compensation: a review and synthesis," Industrial and Corporate Change, Oxford University Press, vol. 19(3), pages 675-712, June.
    3. Paul Gompers & Joy Ishii & Andrew Metrick, 2003. "Corporate Governance and Equity Prices," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 107-156.
    4. George P. Baker & Brian J. Hall, 2004. "CEO Incentives and Firm Size," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 767-798, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. How to succeed
      by ? in Stumbling and Mumbling on 2014-02-11 14:12:00
    2. The economic base of virtue
      by ? in Stumbling and Mumbling on 2014-07-30 13:30:00
    3. Narcissism, hubris and "success"
      by ? in Stumbling and Mumbling on 2014-10-05 11:56:00
    4. This Is Your Brain on Money: Why America's Rich Think Differently Than the Rest of Us
      by Sean McElwee in Huffington Post Business on 2014-10-18 22:08:22
    5. This Is Your Brain on Money: Why America's Rich Think Differently Than the Rest of Us
      by Sean McElwee in Huffington Post Money on 2014-10-18 22:08:22
    6. Exploitation in the lab
      by ? in Stumbling and Mumbling on 2015-02-20 14:39:00
    7. Bosses pay: the right's problem
      by ? in Stumbling and Mumbling on 2016-08-09 13:14:00
    8. Does character matter?
      by ? in Stumbling and Mumbling on 2016-11-10 13:32:00
    9. The demand for bastards
      by ? in Stumbling and Mumbling on 2017-04-26 13:23:00
    10. What do earnings tell us?
      by chris in Stumbling and Mumbling on 2018-03-15 13:52:38

    More about this item

    Keywords

    Business; Executive Compensation;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:indrel:qt6dt7p2pm. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff). General contact details of provider: http://edirc.repec.org/data/irucbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.