Premium
The face of risk: CEO facial masculinity and firm risk
Author(s) -
Kamiya Shinichi,
Kim Y. Han Andy,
Park Soohyun
Publication year - 2019
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/eufm.12175
Subject(s) - masculinity , volatility (finance) , business , liberian dollar , leverage (statistics) , face (sociological concept) , stock (firearms) , monetary economics , demographic economics , labour economics , psychology , economics , finance , sociology , mechanical engineering , social science , machine learning , computer science , psychoanalysis , engineering
We examine whether a male CEO's facial masculinity, measured by facial width‐to‐height ratio (fWHR), predicts the riskiness of his firm. Using the face pictures of 1,162 CEOs in the Execucomp database, we find supporting evidence. Firms with more masculine‐faced CEOs have higher stock return volatility and higher financial leverage and are more acquisitive. Their frequency of acquisitions, the dollar amount spent on acquisitions, and the takeover premium are all higher. We find that more masculine‐faced CEOs’ compensation is more sensitive to the risk of the firm. The result is robust when we use AI (artificial intelligence)‐measured fWHR of the CEOs.