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Declining stock values? You need to hire a “hot CEO”!

Friday, January 10, 2014
posted by Douglas Keene

marissa mayerLike Yahoo! did when they hired Marissa Mayer. At least one media outlet chose to illustrate their writeup of today’s study with Ms. Mayer. We’ve written before about law firm success but that seems to be tied not to the “hotness” of the managing partner but to their appearance of  competence. Ms. Mayer was loudly criticized for her decision that employees could no longer work-from-home and raised eyebrows with a glamorous photo spread in Vogue magazine

These researchers were looking at what they called a “facial attractiveness index” which they say is based on something called “facial geometry”. Photographs of CEOs were collected from S&P 500 companies (a total of 677 individuals) and the photos were scored based on a “facial attractiveness index”. The researchers comment on Ms. Mayer’s facial geometry:

“She scored 8.45 (out of 10) in our facial attractiveness index and is among the top 5 percent (best-looking) in our sample. Yahoo has been doing well since she became the CEO (about 158 percent increase in stock price). Of course, we don’t mean that all the increase in stock price is from her appearance. We just find that there might be some positive correlation between the two.”

The researchers used a website called–“a web-based photo analysis application that computes a facial beauty score according to a person’s facial geometry. The construction of this score is based on scientific research, various elements of neoclassical beauty, and statistical analysis.” (This website is at least trying to be a step up from the infamous

The researchers find the following (highly predictable) results:

More attractive CEOs receive higher total compensation.

More attractive CEOs are related to better stock returns in their first days on the job.

More attractive CEOs obtain higher returns around merger announcement dates.

More attractive CEOs seem to enhance organizational image and ultimately result in higher stock prices (and thus increased shareholder value).

The researchers think their results require further research and comment they “certainly would not recommend” that companies factor attractiveness at the top when hiring CEOs. Forbes wonders just what the companies with less attractive CEOs should do–replace their CEO with one who is more attractive? Offer free cosmetic surgery? Hair replacement therapy? Hire corporate appearance coaches?

The research has certainly struck a nerve in corporate America but for us, it’s pretty old news. Social psychology research has long posited that attractive people are rewarded for their attractiveness. We’ve written about it here repeatedly. Depending on your case facts, you may actually want to play down your client’s beauty or enhance your client’s below-average appearance.

The bottom line is that the attractiveness of your client is going to be a factor in juror decision-making. Sometimes it works for you and sometimes it works against you. Pretrial research can help you figure out which way attractiveness is going to cut (for you or against you) and then you can work on ways to make your very attractive client attractive on the inside as well so that jurors see him or her as more like them (always a good thing). You do the same thing with your less than attractive client–make them more attractive on the inside and show their insides to the jurors.

Halford, Joseph, Taylor Hsu, & Scott H. C. (2013). Beauty is Wealth: CEO Appearance and Shareholder Value. SSRN Electronic Journal. DOI: 10.2139/ssrn.2357756


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