The beguiling behaviour of narcissistic CEOs: Evidence from repurchase announcements

Boamah, Evans O and Banerjee, Shantanu ORCID: 0000-0002-5247-748X (2024) The beguiling behaviour of narcissistic CEOs: Evidence from repurchase announcements. Journal of Business Finance & Accounting, 51 (3-4). pp. 717-755.

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Official URL: http://dx.doi.org/10.1111/jbfa.12796

Abstract

<jats:title>Abstract</jats:title><jats:p>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.</jats:p>

Item Type:	Article
Divisions:	Faculty of Humanities and Social Sciences > School of Management
Depositing User:	Symplectic Admin
Date Deposited:	11 Apr 2024 07:38
Last Modified:	16 Apr 2024 14:29
DOI:	10.1111/jbfa.12796
Related URLs:	Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3180269