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The beguiling behaviour of narcissistic CEOs : evidence from repurchase announcements
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Boamah, Evans O. and Banerjee, Shantanu (2024) The beguiling behaviour of narcissistic CEOs : evidence from repurchase announcements. Journal of Business Finance & Accounting . doi:10.1111/jbfa.12796 ISSN 0306-686X. (In Press)
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Official URL: https://doi.org/10.1111/jbfa.12796
Abstract
We study whether Chief Executive Officer (CEO) narcissism affects a firm's share repurchase announcements and their implementations. Using signature characteristics as a measure of narcissism, we find that US firms with narcissist CEOs are more likely to make repurchase announcements and announce higher repurchase dollar amounts. However, these firms are less likely to follow through. Actual repurchases by these firms are less frequent, and they use a smaller amount of cash for share buyback because they have a higher cashflow sensitivity of cash. Narcissist CEOs’ repurchase announcements are less driven by market timing and have a lower announcement effect compared to those by other CEOs. The higher rate and amount of repurchase announcements are more pronounced in poorly governed firms with narcissistic CEOs. These results are robust to various specifications including a difference-in-difference set-up using CEOs’ exogenous turnover, controlling for other CEO traits and using an alternative measure of narcissism based on pronoun usage in CEO communications. Collectively, the results presented in this study demonstrate that narcissist CEOs play a critical role in the intensity of share repurchase announcements and their executions, particularly for firms with weaker governance structures.
Item Type: | Journal Article | ||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management H Social Sciences > HM Sociology |
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Divisions: | Faculty of Social Sciences > Warwick Business School > Accounting Faculty of Social Sciences > Warwick Business School |
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Library of Congress Subject Headings (LCSH): | Chief executive officers, Narcissism, Repurchase agreements | ||||||
Journal or Publication Title: | Journal of Business Finance & Accounting | ||||||
Publisher: | Wiley-Blackwell Publishing Ltd. | ||||||
ISSN: | 0306-686X | ||||||
Official Date: | 26 March 2024 | ||||||
Dates: |
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DOI: | 10.1111/jbfa.12796 | ||||||
Status: | Peer Reviewed | ||||||
Publication Status: | In Press | ||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||
Date of first compliant deposit: | 28 March 2024 | ||||||
Date of first compliant Open Access: | 28 March 2024 |
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