A sign can tell a lot

By Nick Seybert

Companies led by CEOs who have large signatures — an indicator of narcissism — perform worse than ones led by CEOs with small signatures. We measured the signatures of 605 CEOs on a decade’s worth of annual reports from nearly 400 S&P 500 companies.

Large signatures — which have been linked to narcissistic personality traits such as dominance and outsize ego — were positively associated with overspending, lower returns on assets and — paradoxically — higher CEO pay relative to that of industry peers. Obviously, we can’t say that everyone with a large signature is a narcissist and, therefore, a bad leader.

But the study we did does show that when an annual report has a big CEO signature on it — as measured by the area of a box drawn around the signature’s end points, and controlling for name length — a firm will, on average, spend more on capital goods, R&D and acquisitions than its industry peers, yet show worse sales and sales growth over the next 3-6 years.

We couldn’t find Steve Jobs’ signature on Apple’s annual reports — and believe me, we tried — but, according to all the stories about him, he definitely had some narcissistic traits. He wouldn’t listen. He berated people. He always had to have his way: from refusing to accept customers’ demands for Adobe Flash to insisting on a glass screen for the iPhone. He also happened to be a genius and a visionary with exceptional taste.

From “Size Does Matter (in Signatures)”