This article accompanies Distinguishing Narcissism from Self-Confidence.
The IMD study looked at how 78 CEOs at 33 major U.S. pharmaceutical firms reacted to the emergence of biotechnology from 1980 to 2008. In their calculations of narcissism, researchers considered these factors:
* Prominence of the CEO's photo in annual reports;
* Number of CEO mentions in press releases;
* Cash compensation (salary and bonus); and
* Non-cash compensation (deferred income, stock grants and stock options) relative to the firm's second-highest-paid executive.
The study's authors concluded that:
* The more narcissistic the CEO, the more heavily -- and the earlier -- the firm invested in new technology; and
* Firms' responses to radical change can be traced to not just environmental and organizational factors, but to executive's attributes.
But, they also suggested that narcissistic CEOs do not guarantee success, suggesting that, while the risk-taking of these CEOs tended to lead to extreme outcomes, some of those outcomes were catastrophic.