Abstract
Can leaders’ names have an impact on their compensation and firm performance? We reason about how and why certain leaders’ names are related to higher financial compensation, yet unrelated to their ability to lead a company and thus firm performance. Based on a sample of 6132 CEOs working at large, publicly traded (S&P 1500) firms, we find that CEOs who have more “fluent” names—or names associated with feelings of cognitive ease (e.g., shorter length, more common)—obtain greater financial as well as non-financial perks, even though they are no more competent. Therefore, the study looks beyond the influence of sex- and race-typed names to help explain the observed mismatch between top management compensation and firm performance. We discuss the theoretical implication of this study for the cognitive bias and discrimination literature, and managerial implications for strategic human resource management.
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