"Love of beauty is taste," said Ralph Waldo Emerson, a co-founder of this magazine. His perspective would fit snugly in a modern corporate boardroom. A raft of new research suggests not only that good-looking CEOs are paid more handsomely, but also that they're actually better for their companies in surprising ways.
Attractive CEOs have “a positive and significant impact on stock returns" when they first appear on television, according to a working paper by Joseph T. Halford and Hung-Chia Hsu at the University of Wisconsin. "Our findings suggest that more attractive CEOs have higher compensation because they create more value for shareholders through better negotiating prowess and visibility," they said. When better-looking execs appear on TV, their stock gets an exaggerated bump. Comely CEOs also snag better terms in mergers with other companies.
Blame the boards for shallowness if you like. But if economic partners, like traders and executives, are going to be suckered by good looks anyway, you might as well pay extra for it.
The problem is that the right look is often valued for the wrong reasons. "Mature-looking" CEOs are presumed to be more competent, according to another study by John R. Graham, Campbell R. Harvey and Manju Puri. But while beautiful faces might actually be more valuable for their companies, there's nothing special about wizened heads or the brains inside them. "Psychology research shows that baby-faced-looking people often possess qualities opposite to those projected by their facial traits," the researchers write (and this author cheers the finding). Mature-looking CEOs aren't any better at their jobs. They're just better at looking like they're better.