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Lead Your Team Managing

The CEO Personality Trait That Commands Big Bucks

The CEO Personality Trait That Commands Big Bucks
Credit: Ollyy/Shutterstock

To get paid the really big bucks, CEOs need an aggressive "me-first" attitude, new research suggests.

Narcissistic CEOs earn more than their non-narcissistic, and merely self-confident, peers, according to a study recently published in The Leadership Quarterly journal. Additionally, there is a larger gap between narcissists' compensation and that of their top management teams than is found between less self-centered CEOs and their teams.

Charles O'Reily, one of the study's authors and a professor in the Stanford Graduate School of Business, described narcissists as those with personalities dominated by self-confidence, a sense of entitlement, grandiosity and low empathy. He said narcissists tend to emerge as leaders because they embody classic 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," O'Reilly said in a statement.

For the study, researchers surveyed employees in 32 large, publicly traded technology companies to determine which businesses were led by narcissistic CEOs. The employees filled out personality assessments about their CEOs, which included rating the chiefs' degree of narcissistic qualities such as "self-centered," "arrogant" and "conceited."

The researchers also scanned CEOs' shareholder letters and earnings-call transcripts, looking for those with an abundance of self-referential pronouns such as "I," which is another tell-tale sign of a narcissist.

The study found that that narcissistic CEOs secure these large contracts, at least in part, by winning over board members and not because their companies perform better than those led by non-narcissistic leaders.

"From the board member's perspective, you've got this person who is quite charming, charismatic, self-confident, visionary, action-oriented, able to make hard decisions (which means the person doesn't have a lot of empathy), and the board says, 'This is a great leader,'" O'Reilly said. He added that board members might not necessarily see their own self-serving, superficial qualities.

The study revealed another reason for narcissistic CEOs' bloated salaries: They often can control those making the decision on salary — hiring compensation consultants. Unencumbered by a sense of fairness toward others, narcissists believe they are special, and will often manipulate others in order to get large pay contracts they believe are their due, researchers said.

O'Reily said businesses that give narcissistic CEOs large salaries and create a pay gap with other top executives risk harming company morale, which can lead to higher employee turnover and lower satisfaction.

Given the dissatisfaction and protests a pay gap can breed among employees, the researchers questioned how narcissistic CEOs could hold onto to their jobs for so long. The study authors concluded that while some employees leave on their own accord, narcissistic CEOs tend to eliminate those who challenge them or fail to acknowledge the leaders' self-perceived brilliance. Researchers added that the same lack of empathy that makes narcissists less likeable to underlings also helps these CEOs fire employees with little guilt.

The study was co-authored by UC Berkeley doctoral student Bernadette Doerr, Santa Clara University professor David F. Caldwell and UC Berkeley professor Jennifer A. Chatman.

Originally published on Business News Daily

Chad  Brooks
Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.

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