CFO Narcissism and the Power of Persuasion Over Analysts: A Mixed-Methods Approach

Publication Date



We study the role of CFO narcissism in both the intent and ability to positively influence
sell-side analysts’ perceptions of the firm. Consistent with the notion that narcissistic individuals
cast favorable impressions on others, we find CFO narcissism is associated with overly optimistic
analyst valuations. Analyses of conference call transcripts reveal that narcissistic CFOs exhibit
greater engagement with analysts—especially with bearish analysts—as well as use more
optimistic language, argumentative prose, and corporate euphemisms, suggesting attempts at
persuasion in public settings. We simulate a private communication channel in a laboratory study
and find that narcissists are more likely to use persuasive methods that involve directly pressuring
analysts (e.g., threatening to remove private lines of communication with management) to induce
higher valuations. Further analyses reveal that narcissism-related analyst overvaluation is largest
for firms with recent losses, negative stock returns and high stock volatility, and that analyst
valuations appear to be least reflective of economic fundamentals when the CFO is narcissistic
and the firm has recently reported negative earnings news. Collectively, evidence indicates that
narcissistic CFOs act opportunistically when exercising persuasive tactics to favorably influence
analysts’ perceptions of firm value.

Document Type



Executive Narcissism, Persuasion, Sell-Side Analysts




SMU Cox: Accounting (Topic)