Egomaniacs Make More Money

NEW YORK (MainStreet) — That arrogant, it's all-about-me coworker – or worst yet, boss -- that drives you nuts has one more irritating quality. That pompous attitude likely means they are making a lot more money than most. It's not a matter of simply self-confidence, but pure and simple narcissism that helps them land the big bucks, according to new research by Professor Charles A. O'Reilly of the Stanford Graduate School of Business.

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Compiling personality profiles of CEOs from 32 prominent high-technology firms, O'Reilly and his associates found that traits such as dominance, a sense of entitlement, grandiosity and little empathy for others are often the common denominator of leaders. And with the corner office comes higher compensation in the form of big salaries, fat bonuses and coveted stock options.

"They don't really care what other people think, and depending on the nature of the narcissist, they are impulsive and manipulative," says O'Reilly. And the longer the me-first leaders have been on top of the heap, the greater the income gap, according to the study published in The Leadership Quarterly earlier this year.

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Such over-the-top "grandiose narcissism" is manifested in energy, self-assuredness charisma and low "agreeableness." Employees of the companies surveyed completed personality assessments about their CEOs, ranking qualities such as "self-centered," "arrogant," and "conceited." Researchers also poured over shareholder letters and earnings call transcripts looking for CEOs using self-referential pronouns such as "I." The study says prior research indicates that narcissists use first person pronouns and personal pronouns more often than non-narcissists.

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O'Reilly says the high-tech industry is fertile ground for impulsive and high-risk leaders.

"In places like Silicon Valley, where grandiosity is rewarded, we almost select for these people," he says. "We want people who want to remake the world in their images."

While big-ego CEOs don't necessarily perform better than more modest leaders, they are certainly paid better, perhaps in part because they find it easier to win over board members.

"From the board member's perspective, you've got this person who is quite charming, charismatic, self-confident, visionary, action-oriented, able to make hard decisions -- which means the person doesn't have a lot of empathy -- and the board says, 'This is a great leader,'" O'Reilly says. Often board members might not necessarily see – or perhaps ignore – the CEO's self-serving, superficial qualities.

Such larger-than-life leaders may "eliminate those who might challenge them or fail to acknowledge their brilliance." With a lack of empathy, narcissists can fire subordinates with little guilt. To avoid being let go by an egocentric boss, O'Reilly says that you must "constantly flatter them. You can't challenge them. Be prepared for them to take credit for your ideas. That's the name of the game."

--Written by Hal M. Bundrick for MainStreet

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