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CEO personality traits and compensation: evidence from investment efficiency

Year: 2025
Type: article
Abstract: We examine the effects of the big five personalities of CEOs (openness, conscientiousness, extroversion, agreeableness, and neuroticism) on their annual compensation. We hand-collect the tweets of S&P 1500 CEOs and use IBM’s Watson Personality Insights to measure their personalities. CEOs with high ratings of agreeableness and conscientiousness get more compensation. We further find that the firms with these CEOs outperform their peers due to better investment efficiency. Firms are willing to pay higher compensation for talent, especially for firms with better operations, located in states with higher labor unionization, or facing higher competition in the product market. Overall, CEO personality is a valid predictor of CEOs’ compensation.
DOI: 10.1007/s11156-025-01391-8
Institutions: Hangzhou Dianzi University, The University of Sydney, Fordham University, Bank of Finland, National Yang Ming Chiao Tung University, National Taipei University
Language: English
Subfield: Accounting
Open Access status: hybrid
Estimated APC paid: $3,190
OpenAlex ID: W4407884643
FWCI: 8.101
Cites: 107
Cited by: 3
Related to: 10