The downside of extroverted CEOs

Businessman and Republican candidate for president Trump greets supporters after speaking at a campaign event in Laconia

WHILE talkative, energetic, sociable leaders may wow investors and employees, they may not be good for business.

Public companies run by chief executives with extroverted personality traits have a higher cost of equity capital—the return shareholders demand for bearing the risk of owning the asset—than otherwise similar firms with less-outgoing CEOs, according to new research led by Biljana Adebambo, an associate finance professor at the University of San Diego.