Should you pick stocks based on how many photos of the C.E.O. are in the company's annual report? The results of a new study might make you consider it.
Companies led by narcissistic chief execs tend to make more frequent strategy changes, undertake larger acquisitions, and experience extreme performance swings, according researchers at Penn State's Smeal College of Business.
"Highly narcissistic C.E.O.s...can be expected to engage in behaviors and make decisions that have major consequences not only for the individuals who interact directly with them, but also for broader sets of stakeholders," write Arijit Chatterjee, graduate lecturer, and Donald Hambrick, Smeal Chaired Professor of Management at Penn State.
The researchers determined the narcissism of 111 C.E.O.s of computer software and hardware companies by the following: the prominence of their photographs in annual reports, the frequency of the their names in company news releases, how much the C.E.O.s talked about themselves in interviews, and how each chief's compensation compared to that of the second in command.
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