August 8, 2014

Stanford Business School Finds Narcissists get Paid More Than Others

narcissists get paid moreNew research by Stanford Graduate School of Business professor shows that it is the persuasive personality and aggressive “me first” attitude embodied by narcissistic CEOs that helps them secure large pay packages. Specifically, narcissistic CEOs are paid more than their non-narcissistic peers. There is also a larger gap between narcissists’ compensation and that of their top management teams than is found with CEOs who do not display the trait. The longer the narcissists have held the top post, the bigger the differential, according to the study.

Narcissism is a personality type characterized by dominance, self-confidence, a sense of entitlement, grandiosity, and low empathy. Narcissists naturally emerge as leaders because they embody prototypical leadership qualities such as energy, self-assuredness, and charisma.

“They don’t really care what other people think, and depending on the nature of the narcissist, they are impulsive and manipulative,” says O’Reilly, whose research examines grandiose narcissism, a form associated with high extraversion and low agreeableness.

The study surveyed employees in 32 large publicly traded technology companies to identify the narcissistic CEOs among them. Employees filled out personality assessments about their CEOs, which included rating the chiefs’ degree of narcissistic qualities, such as “self-centered,” “arrogant,” and “conceited.”

They also completed a Ten Item Personality Inventory (TIPI) about their CEOs. In addition, researchers scanned CEOs’ shareholder letters and earnings call transcripts for an abundance of self-referential pronouns such as “I.” Narcissists use first person pronouns and personal pronouns more often than their non-narcissistic peers.

Narcissistic CEOs secure these pay contracts, at least in part, by winning over board members. The study found that companies with highly narcissistic top bosses do not necessarily perform better than those led by less narcissistic chiefs. Narcissistic CEO/founders obtained even larger compensation than their narcissistic peers who didn’t found their companies.

The study also found that the longer the narcissistic chief executive was in charge, the farther ahead of his team his pay progressed, because he had recurring exchanges with the board, seeking more money for himself and less for his team.

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Joshua Bjerke, from Savannah, Georgia, focuses on articles involving the labor force, economy, and HR topics including new technology and workplace news. Joshua has a B.A. in Political Science with a Minor in International Studies and is currently pursuing his M.A. in International Security.