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Firm performance as a mediator of the relationship between CEO narcissism and positive rhetorical tone

Mohamed M. Tailab (Department of Finance and Investment, Lincoln University, Oakland, California, USA)
Nourhene BenYoussef (Accounting Department, Université de Sherbrooke, Sherbrooke, Canada)
Jihad Al-Okaily (Department of Accounting and Finance, King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia and Interdisciplinary Research Center for Finance and Digital Economy, King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia)

Journal of Financial Reporting and Accounting

ISSN: 1985-2517

Article publication date: 13 February 2023




The purpose of this paper is to examine how chief executive officers’ (CEOs) narcissism impacts firm performance and how this, in turn, affects a CEO’s positive rhetorical tone.


The narcissism score is measured by using an analytical composite score for each CEO based on eight factors. The paper uses textual analysis on a sample of 848 CEO letters of US firms over the period 2010–2019. WarpPLS software, version 7.0 was used to conduct structural equation modeling through the partial least squares because a non-linear algorithm exists between CEO narcissism, firm performance and positive tone, and the values of path coefficients moved from non-significant to significant.


The results suggest that performance partially mediates the relationship between CEO narcissism and positive tone. This indicates that not all the positivity expressed by narcissistic CEOs is opportunism; some of it is indeed driven by better performance. The reported findings indicate that firm performance explains one-quarter of a CEO’s positive words, whereas some three-quarters of the positivity is driven by a narcissistic CEO (i.e. opportunism). A comparison of letters signed by highly narcissistic and less narcissistic leaders reveals that among those letters signed by highly narcissistic leaders, firm performance plays a significant mediating role between narcissistic tendencies and positive tone. However, among those with less narcissistic score, there is no evidence that performance mediates the tone and narcissism. Interestingly, both highly narcissistic and less narcissistic CEOs use positive words and optimistic expressions even when their firms perform poorly or negatively.

Research limitations/implications

The results help shareholders be aware that CEOs may opportunistically use their personal characteristics and language to manipulate them. Data limitations about women CEOs were one of the reasons behind the small proportion of women CEOs in this study, making it low in generalizability.

Originality value

A comprehensive review showed that none of previous studies examined the more ambiguous relationship between a CEO’s narcissist tendency, the firm’s performance, and CEO rhetorical tone. As one set of studies focused on Narcissism → Performance, and the other one on Performance → Tone, this current study completes the picture with Narcissism → Performance → Tone.



The authors would like to thank Aziz Jaafar (editor) and two anonymous reviewers for their helpful comments and suggestions. The authors also thank Tine Buyl, Khrystyna Bochkay and Murad Moqbel for their insightful, supportive feedback and comments on this research paper.

Funding: The author(s) received no financial support for the research, authorship and/or publication of this paper.

Declaration of competing interest: The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.


Tailab, M.M., BenYoussef, N. and Al-Okaily, J. (2023), "Firm performance as a mediator of the relationship between CEO narcissism and positive rhetorical tone", Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print.



Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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