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Beauty is wealth: CEO attractiveness and firm value
Author(s) -
Halford Joseph T.,
Hsu HungChia S.
Publication year - 2020
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/fire.12234
Subject(s) - attractiveness , beauty , earnings , value (mathematics) , construct (python library) , executive compensation , stock (firearms) , business , compensation (psychology) , economics , accounting , psychology , social psychology , political science , mechanical engineering , machine learning , computer science , psychoanalysis , law , programming language , engineering
This paper examines whether and how CEO attractiveness relates to firm value. We construct a Facial Attractiveness Index of 667 CEOs based on their facial geometry. More attractive CEOs are associated with better stock returns surrounding their job announcements and around earnings‐announcement news with CEOs' images. Further, more attractive CEOs are related to higher acquirer returns following acquisition announcements and higher Tobin's Q . Finally, consistent with the existing literature documenting the beauty premium in pay, more attractive CEOs receive higher compensation.