TY  - JOUR
AU  - Graham,John R.
AU  - Harvey,Campbell R.
AU  - Puri,Manju
TI  - A Corporate Beauty Contest
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15906
PY  - 2010
Y2  - April 2010
UR  - http://www.nber.org/papers/w15906
L1  - http://www.nber.org/papers/w15906.pdf
N1  - Author contact info:
John Graham
Duke University
Fuqua School of Business
100 Fuqua Drive
Durham, NC 27708-0120
Tel: 919/660-7857
Fax: 919/660-8038
E-Mail: john.graham@duke.edu

Campbell R. Harvey
Duke University
Fuqua School of Business
Durham, NC 27708-0120
Tel: 919/660-7768
Fax: 919/660-8030
E-Mail: cam.harvey@duke.edu

Manju Puri
Fuqua School of Business
Duke University
1 Towerview Drive, Box 90120
Durham, NC 27708-0120
Tel: 919/660-7657
Fax: 919/681-6246
E-Mail: mpuri@duke.edu
AB  - We conduct beauty contest experiments, using close to 2,000 subjects to study the facial traits of CEOs. In one experiment we use pairs of photographs and find that subjects rate CEO faces as appearing more “competent” and less “likable” than non-CEO faces. Another experiment matches CEOs from large firms against CEOs from smaller firms and finds large-firm CEOs look more competent and likable. In a third experiment, subjects numerically rate the facial traits of CEOs.  We find that executive compensation is linked to these perceived “competence” ratings. Our analysis explores these findings in more detail and shows that the facial-trait rating can be explained by a quantitative scoring of the “maturity” or “baby-facedness” of the CEO. That is, more mature looking CEOs are assigned higher “competence” scores. This finding is potentially worrisome because psychology research shows that baby-faced-looking people often possess qualities opposite to those projected by their facial traits.  Accordingly, we find no evidence that the firms of competent looking CEOs perform better. Essentially, the "look" of competence says very little about effective competence.
ER  -