Do Investors Respond to CEO Facial Expressions of Anger During Television Interviews?

Abstract

Televised media interviews with public company CEOs occur nearly every trading day. During these interviews, investors observe visual cues in addition to hearing the verbal information managers disclose. Building on findings in the psychology and communications literature, we ask whether investors learn from CEO facial expressions. Using a sample of 959 interviews on CNBC from 2014-2018, we focus on CEO expressions of anger, an emotion generally associated with negative outcomes. We find that CEOs are more likely to show facial expressions of anger when the CEO is more expressive generally, when the journalist shows an angry facial expression, and when recent stock returns are lower. We also find that investors respond negatively to CEO facial expressions of anger and that CEO anger can nullify the benefits of a positive message from journalists.