A CEO's Signature Can Predict How Financially Healthy A Company Really Is


Photo: flickr/americaswildlife

Signature size has been found to be a good measure of ego.When it comes to CEOs, an autograph on a yearly SEC filing is a particularly public and significant demonstration, and a good measure of narcissism. 

A new study from Charles Ham at the University of Maryland takes a look at the size of CEOs’ signatures on yearly SEC filings and whether big signatures lead to worse performance.

Narcissistic CEOs have been found to make more aggressive, unilateral decisions without incorporating feedback, which can lead to poorer performance. 

The study found that CEOs with larger signatures perform worse by a number of metrics. They have a lower return on assets despite investing more, pay lower dividends, yet still receive higher compensation.

So, they spend more aggressively, return less to shareholders, and keep more for themselves. Those effects are magnified for firms operating in uncertain circumstances, which makes sense as impulsive decisions and their negative effects increase in those times.

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