COMPENSATION OF NARCISSISTIC CEOs WITH STAKE IN EQUITY: A STUDY OF POLISH COMPANIES

Authors

Keywords
CEO narcissism, CEO ownership, CEO compensation, individual and interactive effects

Abstract
Background: Behavioural personal characteristics are proven to have an impact on corporate decisions. There have been many behavioural biases and fallacies identified so far. One of the important behavioral traits is narcissism. Managerial narcissism and the belief in their own grandiosity affect their corporate behaviour. Previous research finds that narcissistic leaders have higher compensation. However, previous research takes into account only job-related compensation and ignores the common fact that the CEO is often the owner of the company. The aim of our research is to explore the impact of a narcissistic CEO who has a financial stake in the equity on their total income. Our research refers to the situation when narcissistic CEOs labour and capital are involved in the same company, which is quite common in a business environment. Thus, the compensation consists of two parts: job-related (salary) and capital-related (dividend).

Methods: We have conducted our research on a sample of 160 companies from the Warsaw Stock Exchange over six years (2017-2022). We have performed statistical analysis of data with descriptive statistics, correlation matrix, and regression analysis.

Results: We have found that a narcissistic CEO with a stake in the company negatively affects both job and total compensation.

Conclusions: We believe that the lower compensation of narcissistic CEOs is the price they pay in return for both their prestige and the sound financial standing of the company. The financial soundness of the company allows them to stay in power (by meeting owners expectations), and remain in the centre of attention.

Structure of the paper: The paper starts with a literature review on the issues included in the research, especially: CEO compensation, CEO ownership, and CEO narcissism. Then, we present our research plan and the methodology. Later, we report our findings and discuss our findings with previous ones. Finally, we present the conclusions.

JEL: G35, G41, J30.
Pages: 21

To view the full text of the article click on the relevant button below.

More titles

  • BUILDING A CONCEPT FOR CYBER SECURITY OF AN EDUCATIONAL ORGANIZATION IN BULGARIA

    Background: The topic of cyber security of organizations is becoming more relevant for modern societies. In that area, both scientific research and practical applications of various platforms, technologies, and tools for guaranteeing security levels have undergone serious development in recent years. The research objective is based on a study of ...

  • TECHNOLOGICAL THEORIES IN ECONOMICS AND MANAGEMENT: EVOLUTION AND APPLIED ASPECTS

    The contemporary stage of social development is characterized by the widespread adoption of technologies that contribute to the effective advancement of business and the economy as a whole. The successful application of these technologies in economic and managerial practices necessitates an exploration of past ideas and experiences, which are ...

  • PROFILING SCHEME FOR POTENTIAL STRESS

    It is a daily task for management to design jobs, pay systems, job descriptions and other aspects of organizational functioning. But by including a profiling of employees potential workplace stress, companies could improve the daily health of employees and support a healthy and motivated organization underpinning a satisfactory company ...