Study: Profits are higher at companies run by hot CEOs

Dig it: Companies run by CEOs with attractive faces tend to have higher profits, according to a pretty hilarious new study appearing in next month's issue of Psychological Science. Psychologists Nicholas Rule and Nalini Ambady took a bunch of pictures of CEOs, put them into grayscale and standardized them in size, and then showed them to college students. The students were given no other information about the CEOs -- they weren't even told which companies they ran. With nothing other than the picture to go on, the students were asked to rate the CEOs according to their apparent "competence, dominance, likeability, facial maturity and trustworthiness."
The upshot? CEOs who scored high on the Am-I-Hot-Or-Not ratings turned out to be piloting the most profitable companies. As a press release notes:
"These findings suggest that naive judgments may provide more accurate assessments of individuals than well-informed judgments can," wrote the authors. "Our results are particularly striking given the uniformity of the CEOs' appearances." The majority of CEOs, who were selected according to their Fortune 1000 ranking, were Caucasian males of similar age.
We could, of course, regard this as a sterling example of "Science Confirms The Obvious." I mean, in modern America, is this news? That attractive, confident-looking white dudes are where it's at? And this comes on the heels of dozens of recent studies of hot-ology, which have demonstrated time and time again that tall, willowy, cocksure white folks are cleaning everyone else's clocks. It also fits neatly into Malcolm Gladwell's thesis in Blink -- i.e. that first impressions are of enormous importance.
Nonetheless, we are, as the scientists note, left with the chicken-and-egg question: "which came first, the powerful-looking CEO or their successful career?"
Posted by Clive Thompson at January 14, 2008 05:18 PM
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I have done some research in this area. In a study that I did people played a game (the Ultimatum Game) against someone whose photo they saw. We had previously taken photos of about 80 people and selected the 6 most & least attractive males & females as rated by a separate panel. Subjects in the photos went to a different university so not much chance of currying favor & hooking up later.
Result: People were more generous to attractive people but also demanded more from them.
Obviously if other people treat you this way, it could help you scale the greasy pole.
HOWEVER, I find your post a bit misleading, since the photos were not rated on attractiveness, but rather "competence, dominance, likeability, facial maturity and trustworthiness." Presumably there are correlations between those characteristics and attractiveness but they are not the same thing. Why didn't they ask for attractiveness?
My final thought regarding this study is that depending on the profit differential among the companies based on CEO appearance and how well it holds up over time, it seems like you could use this methodology to play the market. Buy when incoming CEO is physically better than outgoing CEO, sell when the opposite occurs.
Posted by: Arrowyn at January 16, 2008 2:18 PM
Arrowyn, I love the buy/sell analysis! And fair enough, one could regard those characteristics -- competence, dominance, likeability, facial maturity and trustworthiness -- as being separate from "attractiveness", though presumably that distinction carries a lot of aesthetic baggage ... a hazard in this area of inquiry overall.
Posted by: Clive at January 18, 2008 11:21 AM
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I have done some research in this area. In a study that I did people played a game (the Ultimatum Game) against someone whose photo they saw. We had previously taken photos of about 80 people and selected the 6 most & least attractive males & females as rated by a separate panel. Subjects in the photos went to a different university so not much chance of currying favor & hooking up later.
Result: People were more generous to attractive people but also demanded more from them.
Obviously if other people treat you this way, it could help you scale the greasy pole.
HOWEVER, I find your post a bit misleading, since the photos were not rated on attractiveness, but rather "competence, dominance, likeability, facial maturity and trustworthiness." Presumably there are correlations between those characteristics and attractiveness but they are not the same thing. Why didn't they ask for attractiveness?
My final thought regarding this study is that depending on the profit differential among the companies based on CEO appearance and how well it holds up over time, it seems like you could use this methodology to play the market. Buy when incoming CEO is physically better than outgoing CEO, sell when the opposite occurs.
Posted by: Arrowyn
at January 16, 2008 2:18 PM
Arrowyn, I love the buy/sell analysis! And fair enough, one could regard those characteristics -- competence, dominance, likeability, facial maturity and trustworthiness -- as being separate from "attractiveness", though presumably that distinction carries a lot of aesthetic baggage ... a hazard in this area of inquiry overall.
Posted by: Clive
at January 18, 2008 11:21 AM