One way to boost stock price: Hire a hot CEO

[The Straight Story]

Can a CEO's face launch a thousand stock purchases?

It doesn't hurt, according to the preliminary findings of a new study, which shows that attractive chief executives receive higher total compensation, better returns on their first days on the job and boost stock performance when they appear on television.

Joseph Halford and Hung-Chia Hsu, two economists at the University of Wisconsin, released a working paper called "Beauty is wealth: CEO appearance and shareholder value." In the paper, they rated the attractiveness of 677 CEOs from S&P 500 companies based on "facial geometry."

The study wanted to find out whether there was a positive relation between the attractiveness of a company's CEO and a return on investment in that company, something argued by John Graham, R.Campbell and Manju Puri in a 2010 paper from Duke University. These three authors said that good looks made CEOs appear more competent and gave them better negotiating skills, enabling them to extract better deals for shareholders.

When looking at the relationship between CEO attractiveness and stock returns around their first day in the job, Halford and Hsu concluded: "We find that FAI (facial attractiveness index) has a positive and significant impact on stock returns surrounding the first day when the CEO is on the job, indicating that shareholders seem to perceive more attractive CEOs to be more valuable."

Halford and Hsu told CNBC that Marissa Mayer, the president and CEO of Yahoo, was a good example, based on their report. "She scored 8.45 (out of 10) in our facial attractiveness index and is among the top 5 percent (best-looking) in our sample," they wrote. "Yahoo has been doing well since she became the CEO (about 158 percent increase in stock price).

http://www.today.com/money/one-way-boost-stock-price-hire-hot-ceo-2D11850724

[Skidmore]

1. Melding vanity and greed.

Who needs education or ethics?

[nolabear]

2. You know what chaps me about this? The only example cited was a woman.

If their study has any validity, given that the vast majority of CEOs are men, then ONE example of a male "hottie" whose company value soared after he came in would have been nice. ONE. I have stayed out of the GD gender conflicts because I do think here we should stop fighting and try to do things differently, so this isn't a broad brush or an invitation to a row, but this seems to me like covert sexism, in the reporting if not in the study.

[caraher]

13. Their study and this article are rather different things

I think the article linked in the OP is exploiting interest in the Yahoo! CEO to drive traffic to the page. But the study analyzes 677 CEOs based essentially on facial symmetries; I don't think it rests on that one woman's story. (I've linked to the (unpublished, not yet peer-reviewed) research paper in another post below).

I think you're wise to be a conscientious objector in the ongoing gender wars in GD!

[Lizzie Poppet]

14. Moreover, Meyer's not really a good illustrative example.

That's because they don't seem to have factored for other influences...such as Meyer's well-known track record. Her management style was very well suited to what had become a sloppy, inefficient company...and shareholders and potential investors knew this, given her rather high-profile tenure at Google. Meyer could have been homely as a mud fence and her hiring would still have raised share prices.

[Le Taz Hot]

3. Nah, there's no agenda here.

[leeroysphitz]

4. and NOBODY else on D.U. has an agenda?

[The Straight Story]

9. So you would prefer benevolent posting? You know, treat others different?

Cause statistically I post a lot of varied stuff - and oddly enough the things that get kicked the most are the ones people are posting in to complain about (while leaving other, more interesting things, to drop).

Maybe the ones with the agendas are the ones replying selectively.

[NuclearDem]

15. Except the stuff you post about women has recently been a woman attempting to poison her family

a female soldier convicted for molesting her son, and this sexist garbage.

Fine, I'll give it to you that it's news. But add to that your rants in more than one gender war thread bemoaning the feminists for not even allowing you to look at a woman or hold a door open for her. Frankly, when it comes to gender, you do have an agenda.

[The Straight Story]

18. Looking at my posts compared to those folks you are mentioning

I think is clear who has an agenda and tends to post solely on a single issue.

But, if it pleases you here is how I will make posts from now on - here is a news story trending (from twitter and reddit):

(Blank) Accused Of Molesting Three Of (Blank) Children While Adults Watched

An Oklahoma (blank) faces serious charges after authorities say (blank) sexually abused (blank) children in the presence of other adults.

(Blank), 30, was arrested in Elk City, Okla., and charged with sexual abuse of children under 12, and child neglect. Police said (blank) abused three of (blank) children from December 2012 to March 2013.

Webb is due in Beckham County Court Jan. 6 for a preliminary hearing, and is being held on a $2 million bond. (blank) four children now live with their grandparents.

A Dec. 18 police affidavit, obtained by The Huffington Post, contains accounts of repeated rapes, beatings and deplorable living conditions through interviews with Webb and (blank) children.

Warning: The following details are graphic.

http://www.huffingtonpost.com/2014/01/03/natalie-webb-sexual-abuse_n_4536569.html

There. Now I can post crime stories without someone running around trying to make it about gender (as they have been doing of late on a select few of my posts). I tend not to like sick freaks and when I come across them post about them. Apparently gender is a big part of the story to some people (which , ya know, is kind of funny because I keep hearing on threads some people post that if we all agree on something why is there fighting about it. We all agree molesting kids is wrong, people's looks should not be important to the job of ceo, etc - yet here we are arguing in the thread. Interesting.....)

[LittleBlue]

5. This surprises me

I never would have thought that beauty has a significant impact. Interesting.

[gollygee]

6. There is a beauty privilege

But beautiful women and beautiful men both enjoy it. I don't know why they chose a woman CEO when there are so few compared to men CEOs, and if you look at CEOs you'll find that attractiveness is a part of what gets them there.

And then another half of this is that being beautiful costs money so there's a wealth privilege involved as well. AS soon as you have that level of money, you can afford a great gym membership, personal trainer, private chef to cook the best healty foods, any cosmetic service you want, great clothes.

[Shandris]

19. As this was something I mentioned in a thread just earlier today...

...you lay it out very well (and only an idiot would think it applies to women only). That intersectionality is a very powerful one that opens a LOT of doors that might otherwise be closed when looking at some of the more obvious privileges.

[FSogol]

7. Hey Big Business! I'm still available! Boost your stock price today!

Just saying.

[sufrommich]

8. This months Harvard Business review has listed

the best performing top 100 CEOs in the world complete with pictures.
The article in the OP used the CEO of Yahoo because if it would have actually used the pics of the top CEOs(of which a whopping 2 are female) it would have blown their theory.

[bonzaga]

10. Yeah, really. This article his horseshit

I don't know where they found this "study" from, but from what I can tell most CEOs, male and female, are dogs.

[sufrommich]

12. Actually,they arent incredibly attractive or unattrative.

That is my point. The vast majority of them have one commonality: older white guy.

[caraher]

11. Here's the (incomplete) paper

Beauty is Wealth: CEO Appearance and Shareholder Value

As nolabear points out, the choice of a female CEO to highlight is questionable...

Also, it's not so much that the best CEOs are the most attractive - it's more about how TV coverage and appearance interact to affect stock values in the short term. From the abstract (emphasis mine):

This paper examines whether and how the appearance of chief executives officers (CEOs) affects shareholder value. We obtain a Facial Attractiveness Index of 677 CEOs from the S&P 500 companies based on their facial geometry. CEOs with a higher Facial Attractiveness Index are associated with better stock returns around their first days on the job, and higher acquirer returns upon acquisition announcements. To mitigate endogeneity concerns, we compare stock returns surrounding CEO television news events with stock returns surrounding a matched sample of news article events related to the same CEO. CEOs’ Facial Attractiveness Index positively affects the stock returns on the television news date, but not around the news article date. The findings suggest that CEO appearance matters for shareholder value and provide an explanation why more attractive CEOs receive “beauty premiums” in their compensation.

[nolabear]

16. Thanks!

[Vashta Nerada]

17. Yahoo has been irrelevant since the late '90s.

This "study" seems like it's trying to bring relevance back to a company that shouldn't be around anymore.