Narcissistic CEOs and executive compensation

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Narcissistic CEOs and executive compensation
The Leadership Quarterly

Narcissism is characterized by traits such as dominance self-confidence a sense of entitlement grandiosity and low empathy. There is growing evidence that individuals with these characteristics often emerge as leaders and that narcissistic CEOsmaymake more impulsive and risky decisions. We suggest that these tendencies may also affect how compensation is allocated among top management teams. Using employee ratings of personality for the CEOs of 32 prominent high-technology firms we investigate whether more narcissistic CEOs 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 and stock options) have more money in their total shareholdings and have larger discrepancies between their own (higher) compensation and the other members of their team.

The Leadership Quarterly 25 (2014) 218 – 231

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