Corporate salary depends on attractiveness

Corporate salary based on looks

The study, which was published by the National Bureau of Economic Research, paired photographs of CEOs of both large and small companies with those of non-executives with similar facial features, hairstyles and clothing and asked 2000 people to assess the images.

"Other researchers have found links between beauty and workers' pay, and demonstrated that politicians benefit from good looks at election time," said researcher John Graham. "We wanted to see whether appearance also plays a role at the corporate executive level."

The study took place during a series of online experiments and photographs of over 100 white male CEOs and non-executives were appraised by the participants.

One of the studies asked 765 participants to rate the people in the photographs according to their attractiveness, competence, trustworthiness, and likeability.

Do looks equate to success?

Almost all of the CEOs in the photographs were rated as more attractive and competent-looking, but the CEOs were also most frequently rated as looking less trustworthy and less likeable in comparison to the non-executives with whom their photographs had been coupled.

Similar findings occurred when 762 participants were asked to rate CEOs of large firms in comparison to CEOs of small firms, according to the same criteria. CEOs of large firms were rated as more competent 55 percent of the time, whereas small firm CEOs were believed to be more attractive, likeable and trustworthy. 

During the set of experiments, the participants were also asked to numerically rate the facial traits of CEOs and the researchers discovered that corporate salary was linked to the perceived "competence" ratings. Analysis of the results revealed that the facial trait ratings could be explained by a quantitative scoring of the "maturity" or "baby-facedness" of the CEO: more mature looking CEOs were assigned higher "competence" scores and vice versa.

The study's researchers believe that these results are "potentially worrisome", due to the fact that "psychology research shows that baby-faced-looking people often possess qualities opposite to those projected by their facial traits."

The researchers went on to say that there is also no evidence that the businesses being run by the more "competent looking" CEOs actually perform better. Indeed, essentially, "the "look" of competence says very little about effective competence." 

Corporate salary affected by looks

The research team also examined the relationship between appearance and salary and discovered that the CEOs who were rated as being competent on the basis of their appearance alone tended to have a higher corporate salary. CEOs who were rated four or above on a five-point scale for competence had an average total compensation 7.5 percent higher than CEOs who scored three out of five on competence.

However, although there was a clear correlation between appearance and salary, the researchers did not find any evidence to suggest that a CEO's appearance is in fact related to company profitability at all.

"I thought the appearance thing was possible for politicians winning elections - but for CEOs, no way," said Campbell Harvey, a finance professor at Duke University. "We are told that CEOs are very carefully vetted by boards of directors and professional consultants - as they should be for their multi-million dollar jobs. The fact that our research shows that appearance is unquestionably significant turns my stomach."

"Given there is no relation between appearance and company performance" concluded Prof. Harvey, "I hope our research changes the way we select our corporate leaders: "looks" should not be a factor!"

To create consistency, the study only used photographs of white male CEOs. However, Manju Puri, another finance professor at Duke University, said that "It would be fascinating to study the role appearance may play in the careers of women and minorities".

He continued: "However, because there are fewer female and minority CEOs, including them in our set of photos would have increased the odds of participants recognizing a CEO, which could have inadvertently influenced their rating of the person’s characteristics."

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