CEO Narcissism and the Takeover Process: From Private Initiation to Deal Completion
Nihat Aktas
, Eric De Bodt
, , Richard Roll
2016, Journal of Financial and Quantitative Analysis, 51(1), pp.113-137
Résumé
Chief executive officer (CEO) narcissism affects the takeover process. Acquirer shareholders react less favorably to a takeover announcement when the target CEO is more narcissistic. Narcissistic acquiring CEOs negotiate faster. They are also marginally more likely to initiate deals. Acquirer CEO narcissism and target CEO narcissism are associated with a lower probability of deal completion and reduce the likelihood that the target CEO will be employed by the merged firm. Our findings highlight the importance of both acquirer and target CEO psychological characteristics throughout the takeover process.