Are Narcissistic CEOs All That Bad?

Brian Tayan is a researcher with the Corporate Governance Research Initiative at Stanford Graduate School of Business. This post is based on a recent paper by Mr. Tayan; David Larcker, Professor of Accounting at Stanford Graduate School of Business; Charles A. O’Reilly, the Frank E. Buck Professor of Management at Stanford Graduate School of Business; and Anastasia Zakolyukina, Associate Professor of Accounting and Neubauer Family Faculty Fellow at University of Chicago Booth School of Business.

We recently published a paper on SSRN, Are Narcissistic CEOs All That Bad?, which examines the prevalence of narcissism among corporate CEOs and the impact that narcissism has on corporate stock-price performance and other outcomes.

The role that a CEO’s personality plays in determining outcomes is a topic of considerable interest to researchers, the media, and the public. This includes not only the association between certain personality types and stock-price performance, but also the impact of personality on strategic choices, governance quality, ethical standards, and corporate image.

Among the broad spectrum of personality types, one that garners significant attention is narcissism, because of its association with larger-than-life personalities. Narcissism is characterized by an inflated sense of self-importance, an excessive need for attention and admiration, and lack of empathy (see Exhibit 1). Common perception is that narcissism is highly prevalent among CEOs. This is because some of the traits that contribute to workplace advancement among executives—self-confidence, risk tolerance, a focus on goal achievement, and more extraverted personalities—are common to narcissists. This has resulted in a number of interesting studies of the subject. Narcissism is by no means required for career advancement and in some settings may impede it. Narcissists might share observable attributes with confident, dynamic, or transformational leaders, but the two are not synonymous. From an external standpoint, however, distinguishing between narcissistic and self-confident leaders can be difficult.

In theory, personality types can be categorized and measured. Standard methods to do so have been developed by clinical psychologists and social scientists. One example is the Big Five Model (or the Five Factor Model) which measures personality across five dimensions: extraversion, agreeableness, conscientiousness, emotional stability, and openness. By this method, narcissists tend to be characterized by high extraversion and low agreeableness. Another model specific to narcissism is the Narcissistic Personality Inventory (NPI), which measures attributes (or subscales) associated with this personality type. By presenting respondents with choice pairs, researchers identify narcissists through a tendency to prefer one set of statements over another (for example, “I like to be the center of attention” is considered more narcissistic than “I prefer to blend in with the crowd”). Other scales have been developed to identify narcissism, including shortened versions of the NPI, the Dark Triad, the Dirty Dozen, and scales from the California Psychological Inventory.

A major challenge for researchers studying narcissism in a corporate setting is that in order to accurately measure a CEO’s personality the individual (or perhaps an associate who knows that individual well) has to fill out a validated questionnaire. For many studies, this is prohibitive. As a result, researchers have tried to develop short-cut methods for identifying narcissistic CEOs. These so-called “unobtrusive” measures rely on associations between narcissism and observable attributes. Examples of unobtrusive methods used in research include speech patterns (such as the frequency of the word “I” as opposed to “we”), video observation (individuals who do not know the CEO assess their personality based on recorded interviews), and observable facts hypothesized to be associated with narcissism (such as the size and placement of the CEO’s photograph in an annual report, signature size, prominence of CEO in press release, and the ratio of CEO pay relative to the second most highly paid executive).

Studies relying on methods such as these sometimes find associations between narcissism and organizational outcomes. They show that narcissistic CEOs exhibit more extreme performance outcomes, make more aggressive strategy bets, make worse acquisitions, have lower quality earnings, and receive excessive pay. Based in part on research studies such as these, one literature review concludes, “There are few positive outcomes of leader narcissism.”

An unanswered question is whether these associations found in the research literature would be replicated if the CEO’s personality was measured directly through a validated instrument rather than through unobtrusive methods. In this Closer Look, we test some basic assumptions about the relation between narcissism and corporate outcomes using a sample of CEOs whose personality is formally assessed by long-time directors who know and have worked closely with that CEO.

CEO Personality

Between June and August, 2020, we distributed surveys to directors of public and private companies, asking them to assess the personality of their company’s CEO. Directors who work closely with an executive over many years and observe firsthand how this individual makes decisions, interacts with others, treats subordinates and also treats internal and external constituents should be well-situated to make an informed assessment of that person’s personality. Our final sample includes results from 182 directors covering 179 unique CEOs.

First, we asked respondents to categorize the CEO using an abbreviated version of the Big Five Model. On a seven-point scale (with a high of 7 and a low of 1), we find a typical CEO scores as follows across each dimension:

  • Extraversion. Characterized by excitability, sociability, talkativeness, assertiveness and emotional expression. Median score 5.5.
  • Agreeableness. Characterized by trust, altruism, kindness, affection, and other prosocial behaviors. Median score 5.5.
  • Conscientious. Characterized by high levels of thoughtfulness, impulse control, and goal-directed behaviors. Median score 7.0.
  • Emotional stability. Characterized by effective stress management, relaxed behavior, and low levels of worry, sadness or depression. Median score 6.5.
  • Openness. Characterized by creativity, adventuresomeness, and a focus on tackling new challenges. Median score 6.0.

In terms of distribution, we see the least variability for conscientiousness and openness. The overwhelming majority of CEOs score high on these dimensions. Only 5 percent of CEOs receive a low score (below a 3) for conscientiousness, and 4 percent receive a similarly low score for openness. We see somewhat higher variability for extraversion, agreeableness, and emotional stability. Still, only 14 percent of CEOs can be considered introverted (below a 3 on the extraversion scale), 12 percent disagreeable, and only 9 percent neurotic (i.e., low in emotional stability—see Exhibit 2).

Prevalence of CEO Narcissism

Next, we measured the prevalence of narcissism among CEOs by asking directors to evaluate their CEO using an abbreviated NPI test. On a seven-point scale, with 7 representing high narcissism and 1 representing low narcissism, we find a typical CEO receives a score of 2.1, suggesting low narcissism.

We observed moderate variability around this score. While around half of CEOs are rated 2 or below in terms of narcissism, 18 percent receive a score above 4, 9 percent a score above 5, and 2 percent receive a score above 6. Using a score of 4 as a cutoff for moderate-to-high narcissism, this suggests that upwards of 18 percent of CEOs might be considered narcissists (see Exhibit 3).

By comparison, some experts estimate that 5 percent of the U.S. population is narcissistic. This suggests that narcissism might be up to 3-times more prevalent among CEOs than among the general population.

We then presented directors with a humility scale, under the assumption that a CEO’s score on the humility scale should be inversely related to their narcissism scores. This is generally what we find. CEOs in our sample receive a median humility score of 6 (on a seven-point scale, with 7 representing very humble). Very few CEOs are considered not humble: Only 2 percent of our sample receive a humility score below 3 (see Exhibit 3). One challenge for researchers is that narcissists, although not in fact humble, are sometimes adepts at feigning humility.

Narcissism and Corporate Outcomes

Finally, we examined the relations between CEO narcissism and corporate outcomes: stock-price performance, ESG ratings, governance quality, and compensation. While our method is not strictly scientific, the results shed light on the general relationship between narcissism and governance.

Stock-Price Performance

We find more narcissistic CEOs are associated with significantly lower stock-price performance in absolute terms and relative to the S&P 500. The median annualized stock-price performance for CEOs in our sample with higher narcissism (NPI above 3.5) is 4 percent compared with median annualized stock-price performance of 27 percent for CEOs with lower narcissism (NPI below 3.5). Relative to the S&P 500, more narcissistic CEOs underperform the benchmark by 12 percent annualized, compared to outperformance of 11 percent annualized for less narcissistic CEOs (see Exhibit 4).


We find narcissistic CEOs oversee companies with higher ESG scores than less narcissistic CEOs. Using the most recent ESG score from Refinitiv during the CEO’s tenure, we find more narcissistic CEOs run companies with a median ESG score of 54, compared with a median ESG score of 45 for less narcissistic CEOs (see Exhibit 4).

These results may seem surprising. In theory, narcissists are more strictly concerned with financial gain and as such should care less about the social benefits of ESG. However, there is evidence that narcissistic CEOs invest in ESG and corporate responsibility to garner positive media attention, in which case their dedication to ESG might be only superficial. Alternatively, it might be that third-party ESG ratings are unreliable measures of ESG quality. Or, it might indeed be the case that narcissists care more about ESG for unexplainable reasons.

Governance Quality

Next, we studied the relationship between narcissism and governance quality. To measure governance quality, we selected seven charter or bylaw features thought to reflect a corporation’s intent to protect the interest of minority shareholders and reduce managerial entrenchment: majority voting in uncontested director elections, unified board structure with annual elections for all directors, action by written consent, shareholder right to call special meetings, simple majority to amend charter and bylaws, and unified share structure.

Surprisingly, we find narcissistic CEOs are somewhat more likely to run companies with good governance features. Specifically, they are more likely to lead companies that do not have a staggered board. They are also more likely to lead companies that allow action by written consent and simple majorities to amend the company’s charter and bylaws. These are considered shareholder-friendly features. The only governance feature that significantly favored less narcissistic CEOs is share structure: We find less narcissistic CEOs are more likely to lead companies with a single-class share structure. Narcissists are slightly more likely to lead companies with unequal share voting rights (see Exhibit 4). However, it might instead be the case that, rather than actually supporting good governance, narcissistic CEOs are better able to “control” the board or reduce its influence, thereby permitting governance friendly features that do not substantively lead to an increase in governance quality.


Last, we studied the relation between narcissism and CEO pay. In our sample, narcissistic CEOs receive median total compensation that is 33 percent higher ($10.34 million) than CEOs that are not narcissistic ($7.79 million). The second most highly paid executive in the company also receives significantly higher pay. As a result, we find no meaningful difference in the ratio of CEO pay to the pay of the second highest executive: 2.1 among companies with narcissistic CEOs compared to 2.3 among companies with less narcissistic CEOs (see Exhibit 4).


In aggregate, we find unexpected relations between CEO narcissism on corporate performance. While stock-price returns are materially worse for companies with narcissistic CEOs, other attributes are more favorable or neutral. Both ESG and governance quality appear to be higher among firms with narcissistic CEOs. While narcissistic CEOs receive higher compensation, their colleagues in the C-suite also appear to receive higher pay, suggesting that financial incentives are not overly skewed toward one individual. The meaning of these results, however, is open to interpretation. It might be the case that higher compensation is granted to the second-in-command to coopt their loyalty rather than to reward them for performance, and that a professed dedication to ESG and governance quality is due to disingenuous virtue signaling. A deeper analysis would examine the degree to which the boards of companies led by narcissist CEOs are “captured” by that individual.

Finally, while we find that narcissism is more prevalent among CEOs than among the general population, narcissism is not as ubiquitous as assumed by many in the public. In fact, the overwhelming majority of CEOs appear to have a fairly healthy personality profile of agreeableness, sociability, conscientiousness, and humility.

Why This Matters

  1. Much of the scientific research into the role of CEO personality on corporate performance is based on unobtrusive measures of personality that rely on somewhat tenuous relations between CEO personality and observable “facts” such as speech patterns, pay ratios, and the prominence of the CEO in corporate communications. How valid are these results? Would they be replicated if CEOs were subjected to a valid personality evaluation?
  2. Studies on CEO personality assume that a CEO has meaningful influence over company performance. Just how much contribution does an individual CEO make to company performance? How does personality contribute to this relationship? How does it manifest itself through leadership, culture, strategy, risk taking, and incentives?
  3. Narcissism is assumed to be highly prevalent among CEOs. However, based on an evaluation by corporate directors who know and have worked with these individuals in a boardroom setting, we find that CEOs in general have a fairly healthy personality profile. How much discussion do directors have about the personality of their CEO and its impact on the firm? What action do directors take, if any, when they identify personality tendencies that might be of concern, such as narcissism, disagreeableness, or low emotional stability? Is coaching in place to address these concerns?
  4. While most research finds that CEO narcissism is detrimental to firm outcomes, using a more direct personality assessment we find mixed results: Stock-price performance is lower, but ESG and governance quality are higher, and the compensation relationship between CEO pay and other senior executive pay appears to be no different when comparing companies with and without a narcissistic CEO. What accounts for these associations? Do narcissists have higher concern for social contribution, shareholder protections, and the pay of their colleagues? Or are narcissists better at corporate “window dressing” than their less narcissistic peers?

The complete paper is available for download here.

Exhibit 1—Narcissistic Personality Disorder

A pervasive pattern of grandiosity, need for admiration, and lack of empathy, beginning in early childhood and characterized by five or more of the following:

  1. Has a grandiose sense of self-importance (e.g., exaggerates achievements and talents and expects to be recognized as superior without commensurate achievements).
  2. Is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love.
  3. Believes that he or she is “special” and unique and can be understood only by, or should associate with, other special high-status people (or institutions).
  4. Requires excessive admiration.
  5. Has a sense of entitlement, unreasonable expectations of favorable treatment or automatic compliance with his or her expectations.
  6. Is interpersonality exploitative, takes advantage of others to achieve his or her ends.
  7. Lacks empathy, is unwilling to recognize or identify with the feelings or needs of others.
  8. Is often envious of others or believes that others are envious of him or her.
  9. Shows arrogant or haughty behaviors or attitudes.

Source: Diagnostic Statistical Manual of Mental Disorders, DSM-5 (Arlington, VA: American Psychiatric Association, 2013), as reproduced in O’Reilly and Chapman (2020).

Exhibit 2: CEOs and Big Five Model Dimensions

CEO Personality




Emotional Stability


Source: Survey of 182 directors covering 179 CEOs of public and private companies.

Exhibit 3: CEO Narcissism and Humility

CEO Personality



Exhibit 4: Narcissism and Corporate Outcomes

Stock-Price Performance

Annualized returns based on CEO tenure, or through December 31, 2020 if CEO is currently at the company. Includes only public companies.


ESG scores from Refinitiv. Scores are produced on a scale of 1 to 100, with 100 representing “good” ESG and 1 representing “bad” ESG.

Governance Features

Based on popular conception of “good” versus “bad” governance features. Note that rigorous researcher does not often find an association between these features and future outcomes.


More narcissistic CEOs are those with an NPI rating above 3.5, and less narcissistic CEOs those with an NPI rating below 3.5.

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