Looks matter - Handsome bank CEOs can earn a million more than their less attractive colleagues

Appearance significantly influences the compensation of chief executive officers in the banking sector according to some interesting new findings. In American banks, CEOs with more attractive facial features earn, on average, one million dollars more per year than their less appealing colleagues.

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.

What the researchers say: “CEOs who are more attractive, on average, receive an annual total compensation approximately 24 percent higher than their less attractive colleagues,” said the study’s lead author.

In their study the team talked 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. The machine-learning model for the study evaluated the CEOs' appearances on a scale from one to five.

The attractiveness scores were based on the subjective perceptions of beauty by a large group of people. A training dataset was created, consisting of many 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,” the researchers explain.

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,” the lead author concludes.

So, what? This study reaffirms previous research which has shown that handsome men and beautiful women are viewed as more trustworthy (particularly if they’re tall). They also tend to be promoted more readily, to be elected, or to be paid more.

Of course, all the CEOs we work with are either handsome or beautiful, astoundingly intelligent, and very trustworthy. They are also well-paid.

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