Handsome bankers earn $1 million more than less attractive counterparts

Good looking bankers and CEOs earn an average of $1 million more than their less attractive counterparts – even if they are worse at their jobs.

Research published in the Journal of Economics and Business found that attractive bank executives earn 24 percent more total pay — while other studies suggest they also bring in more investment thanks to their looks.

The authors of the study, published earlier this year, concluded that “good looks pay off,” especially in the high-stakes banking world.

They say this is because good-looking executives are more likely to attract investors and get promoted purely because of their physical attributes.

That’s despite the fact that good-looking bosses are at a higher risk of making mistakes than their more domestic colleagues, as a lifetime of praise for their looks can make them arrogant and prone to taking risks that backfire.

The study was authored by Finnish academics Shaker Ahmed, Mikko Ranta, Emilia Vähämaa and Sami Vähämaa, and they assessed 167 banks and 272 individual CEOs.

“Facial Attractiveness and CEO Compensation: Evidence from the Banking Industry” claims that the total compensation of CEOs with above-average looks is about 24 percent, or $1.06 million, higher than the compensation of CEOs with below-average looks.

In addition, good-looking employees receive 55 percent more bonuses, stock exchanges and options exchanges than their less attractive colleagues.

Significantly, the study also found that the so-called “beauty premium” could not be explained by the age, gender or ethnicity of the people they studied.

And the trends were the same regardless of bank size or business model.

The summary of the article reads: ‘This article examines the effect of facial attractiveness on the remuneration of banks’ Chief Executive Officers (CEOs).

Consistent with the so-called beauty premium hypothesis, we document that good looks pay off for bank CEOs. Using machine learning to assess the facial expressions of the CEOs of major US banks, we found that the attractiveness of the CEO’s face is positively related to annual total compensation and the discretionary, performance-based components of compensation.

“The total pay of bank CEOs with above-average appearance is about 24% higher than the pay of CEOs with below-average appearance after controlling for several CEO-specific and bank-specific attributes known to influence executive pay .

Furthermore, our results indicate that facial attractiveness is weakly positively related to annual base salary, while it is unrelated to wage performance and wage risk sensitivities of bank CEOs’ pay.

“Taken together, our empirical findings provide strong evidence for the existence of a beauty premium in the executive job market.”

The study used technology to assess CEOs’ beauty based on “the biological characteristics of beauty, such as facial averageness, bilateral symmetries and sexual dimorphism, as well as non-physical characteristics such as a pleasing expression, youthful appearance and good grooming.” ‘.

It continues: ‘Our empirical findings provide strong evidence for the existence of a beauty premium in CEO compensation.

In particular, we document that facial attractiveness is positively associated with total compensation and discretionary performance-based compensation components of bank CEOs.

The size of the documented beauty premium in bank CEO compensation is economically significant.

Our results suggest that an increase of one standard derivation in the CEO attractiveness measure increases total compensation by nearly 9% ($395,000) after controlling for several CEO-specific and bank-specific attributes known to influence employee compensation. Drivers.

In addition, the total compensation of above-average-looking CEOs is about 24% ($1.06 million) higher than the compensation of CEOs of below-average appearance, and the above-average-looking CEOs have about 55% more bonuses, stock exchanges, and options exchanges than their less attractive peers.

Nevertheless, our findings also indicate that facial attractiveness is only weakly positively related to annual base salary, while it is unrelated to wage performance and wage risk sensitivities of bank CEOs’ pay.

“We also show that the beauty premium in bank CEO pay cannot be explained by demographics such as age, gender or ethnicity, nor by differences in bank size and business models.”

And according to separate research from the Shanghai Advanced Institute of Finance, good-looking managers attract more investment than their uglier colleagues, even though their funds aren’t performing as well, WSJ reports.

The researchers suggest that this performance gap may be due to more attractive employees approaching their jobs with more confidence.

The level of attractiveness of colleagues, and the correlation it has with work output, has previously been the subject of discussion in the workplace.

Debrahlee Lorenzana publicly accused Citibank of firing her in 2010 because her double-D implants made her “too attractive” and “too distracting” for male colleagues.

After undergoing extensive plastic surgery to look like a “cross between Pamela Anderson and Carmen Electra,” Lorenzana said she was sexually harassed because of her figure.

She said she was ordered not to wear turtlenecks, pencil skirts, four-inch heels or fitted suits.

Lorenzana, a 33-year-old single mother at the time, said other female colleagues wore much more revealing outfits than she did.

“They said their body shapes were different from mine and that I was attracting too much attention,” she said at the time.

The case eventually went to arbitration, but Citi has since confirmed they paid her nothing in damages.

Lorenzana later went on to work for Chase at branches in Brooklyn and Queens.

More recently, Elizabeth Holmes, the now-disgraced founder of Theranos, came out to say she was forced to wear turtlenecks and red lipstick as a disguise while trying to get investment for her company.

In reality, she claims she’s more relaxed – with less tame hair and normal clothes.

But since her scam scheme came to light, she revealed that even her famous voice was an act – all to lure more people to her outdated science and tech startup.