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Narcissistic CEOs Lose 5% ROA, 26% Q in Related-Party Deals

6/20/2026

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Summary

Story summary

US researchers found that CEOs with higher narcissism are more likely to engage in related-party transactions, especially nonbusiness deals.
Nonbusiness deals include loans, guarantees, or consulting arrangements with directors.
Low-narcissism CEOs experience performance gains from these deals, supporting the efficient-contracting view.
High-narcissism CEOs suffer a 5 % drop in return on assets and a 26 % decline in Tobin’s Q when such deals occur.

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Story summary

US researchers found that CEOs with higher narcissism are more likely to engage in related-party transactions, especially nonbusiness deals.
Nonbusiness deals include loans, guarantees, or consulting arrangements with directors.
Low-narcissism CEOs experience performance gains from these deals, supporting the efficient-contracting view.
High-narcissism CEOs suffer a 5 % drop in return on assets and a 26 % decline in Tobin’s Q when such deals occur.