Looks matter – handsome bank CEOs can earn a million more than their less attractive colleagues
Research suggests that appearance significantly influences the compensation of chief executive officers in the banking sector. In American banks, CEOs with more attractive facial features earn, on average, one million dollars more per year than their less appealing colleagues.
![Sami Vähämaa](/data/images/public/69819791/70024690/41a6fc67-5599-48af-bc3b-81b33610ca73-w_720.jpg)
This insight comes from a recent study conducted by researchers from the University of Vaasa and Hanken School of Economics, Finland. The study published in the Journal of Economics and Business examined the connection between the attractiveness of CEOs' facial features and their compensation in the banking sector.
– CEOs who are more attractive, on average, receive an annual total compensation approximately 24 percent higher than their less attractive colleagues, says Sami Vähämaa, professor of accounting and finance at the University of Vaasa.
Vähämaa’s research team included Mikko Ranta, associate professor of accounting, and Shaker Ahmed, project researcher from the University of Vaasa, along with Emilia Vähämaa, associate professor of finance from Hanken.
Beauty pays off in banking too
In their study, Vähämaa and his team talk about a beauty premium, that is extra compensation given to employees based on their pleasing appearance. When comparing individuals in the same profession and position, it has been observed that attractive employees, on average, earn more.
The research dataset included 167 U.S. banks and 272 individual CEOs. The researchers employed machine learning to objectively assess the facial appearance of the bank CEOs. Mikko Ranta constructed a machine-learning model for the study, which evaluated the CEOs' appearances on a scale from one to five.
The attractiveness scores generated by the machine-learning model were based on the subjective perceptions of beauty by a large group of people. A training dataset was created, consisting of a large number of facial images and subjective evaluations of the individuals' appearances.
– American bank CEOs form a highly homogeneous group: white males who are around 50 to 60 years old. We tested our machine-learning model on images of the actor George Clooney, who represents this age group and is generally considered attractive. The model gave him scores ranging from 4.2 to 4.5 depending on the image. In contrast, the average attractiveness score for bank CEOs' facial features was 2.7, explains Vähämaa.
The study revealed that the beauty premium in CEO compensation cannot be explained by demographic factors such as age, gender, or ethnic background. Therefore, the beauty premium, an extra reward based on pleasant appearance, exists even in the high-paying CEO job market.
– Good looks benefit bank CEOs. Our research findings indicate that appearance has a significant positive impact on the total compensation of bank CEOs and especially on their discretionary, performance-based compensation, concludes Vähämaa.
Further information
Professor Sami Vähämaa, University of Vaasa, Finland, tel. +359 29 449 8455, sami.vahamaa@uwasa.fi
- Shaker Ahmed, Mikko Ranta, Emilia Vähämaa, Sami Vähämaa (2023) Facial attractiveness and CEO compensation: Evidence from the banking industry, Journal of Economics and Business, Volume 123, 2023 https://doi.org/10.1016/j.jeconbus.2022.106095
Keywords
Images
![Sami Vähämaa](/data/images/public/69819791/70024690/fc59bb78-c9bc-40fa-921b-e0a36355f1d1-w_240.jpg)
![Professor Sami Vähämaa, University of Vaasa](/data/images/public/69819791/70024690/b2ff0132-2a4a-4196-9956-b6de7adb3242-w_240.jpg)
![Professor Sami Vähämaa, University of Vaasa](/data/images/public/69819791/70024690/db628167-cea9-4cc0-babd-0aa90514f0d9-w_240.jpg)
University of Vaasa
The University of Vaasa is an international research university in Finland with 5,500 students and high-level expertise in business, technology, management, and communications.
Alternative languages
Subscribe to releases from Vaasan yliopisto
Subscribe to all the latest releases from Vaasan yliopisto by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Vaasan yliopisto
Vaatteiden loppuun käyttäminen yhteydessä parempaan hyvinvointiin, paljastaa tuore tutkimus29.8.2024 15:08:10 EEST | Tiedote
Vaatteiden käyttäminen loppuun on vahvemmin yhteydessä kuluttajien kasvaneeseen hyvinvointiin kuin uusien vaatteiden ostaminen, käy ilmi Vaasan yliopistossa tehdystä tutkimuksesta.
Kutsu medialle: Vaasan yliopiston laaja kampusremontti valmis – tervetuloa tutustumaan tiloihin 5.9.28.8.2024 08:28:52 EEST | Kutsu
Vaasan yliopiston Tervahovi-rakennuksen uudistuksen valmistumisen myötä koko kampusremontti on tullut päätökseensä.
Vaasan yliopisto ja Vaasan energiaklusteri perustavat Energiatransition piilaakson6.8.2024 18:22:53 EEST | Tiedote
Vaasassa – Pohjois-Euroopan suurimmassa energia- ja ympäristöalan yritysekosysteemissä – on käynnissä Wasa Future Festival -tapahtuma 5.8.–10.8.2024. Keskiviikkona 7.8.2024 kello 16.00 tapahtumassa keskitytään vihreän siirtymän tulevaisuuden visiontiin ja julkistetaan suunnitelma mittavasta kehityshankkeesta ja siihen liittyvistä investoinneista alueen kehittämiseksi.
Vaasan yliopistolle kansainvälisesti arvostettu kauppatieteiden AACSB-akkreditointi2.8.2024 07:36:21 EEST | Tiedote
Vaasan yliopistolle on myönnetty kansainvälisesti arvostettu kauppatieteiden alan kuusivuotinen AACSB-akkreditointi. Tunnustus kertoo kauppatieteellisen koulutuksen sekä tutkimuksen laadusta ja huippuosaamisesta. Vain alle kuusi prosenttia maailman kauppakorkeakouluista on saanut AACSB-akkreditoinnin. AACSB on pitkäaikaisin maailmanlaajuinen kauppakorkeakoulujen akkreditointielin ja suurin kauppakorkeakouluverkosto.
Innovaatioyrittäjä ja koulutussijoittaja Pekka Koponen aloittaa Vaasan yliopiston työelämäprofessorina erityisalanaan teollinen muutos1.8.2024 10:00:00 EEST | Tiedote
Innovaatiokonsultointiyritys Spinversen perustaja ja koulutusalan sijoittaja Pekka Koponen aloittaa Vaasan yliopiston työelämäprofessorina 1.8.2024 erityisalanaan teollinen muutos. Tehtävä on kolmivuotinen.
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.
Visit our pressroom