The Consequences of Being Yourself: An Analysis of the Impact of CEO Traits on Their Dismissal and Compensation

Date

2022

Authors

Faile, Kristen Michelle

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Abstract

This three-paper dissertation draws from literatures on leadership (i.e. implicit leadership theory), psychology (i.e. personality and motivation theories), CEO compensation, Boards of Directors, gender differences, and CEO dismissal to develop theory regarding how previously under-researched individual attributes of CEOs influence important outcomes like CEO compensation and the risk of CEO dismissal. These papers will test the conceptual models for each paper using measures that rely on machine-learning-based and hand-collected data approaches. We find in Study one that the personality and motivational traits of CEOs interact (i.e. channeling theory) to increase their likelihood of being fired. Specifically, CEOs who are highly open to experience or neurotic are more likely to be fired. CEOs with a high need for affiliation are marginally more likely to be fired, but when combined with the traits of openness or neuroticism, are significantly more likely to be dismissed. Study two finds that CEOs who are higher in openness or agreeableness receive higher compensation. Study three finds that the amount of females on a CEO's Board of Directors moderates the positive relationship between CEO agreeableness and compensation by strengthening the relationship; in other words, when there are more females on a BOD, more agreeable CEO's make more money. Together, the work in this dissertation means to contribute to the growing field on how the individual differences of top executives influence the outcomes of themselves and their organization.

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Keywords

Big Five personality traits, CEOs, executive leadership, Implicit leadership theory, strategic management

Citation

Department

Management