Paid for looks when others are looking: CEO facial traits, compensation, and corporate visibility

Using both archival data and survey data in which participants rated the facial traits of S&P 500 CEOs, we find that CEOs perceived as more competent or attractive receive a higher salary but not higher non-salary pay, particularly for firms with higher corporate visibility (conceptualized as investor visibility, customer visibility, and media visibility). However, findings also show that the favorable perceptions of CEO facial traits do not predict firm performance. Further testing shows that externally (internally) hired CEOs are paid a salary premium for looking competent (attractive), suggesting that the salary-facial traits relation may depend on how much information is readily available about the CEO candidate’s ability when s/he is hired. Supplemental analyses provide evidence that the CEO salary-facial traits relation varies depending on CEO characteristics and firm board characteristics. Implications for the CEO labor market are discussed.