Research from Bayes Business School (formerly Cass) found that a CEO’s last name can significantly impact their job security and boost their pay by as much as 4.9%. The study looked at data spanning 16 years, tracking how people in the U.S. perceived CEOs’ last names and where they came from. This perception was then linked to CEO pay and job security.

The study adds to what we know about cognitive dissonance, suggesting that people’s opinions about a person can be swayed by their name.

The research had several key findings findings:

1. If a CEO’s last name gets more favorable, their total pay can go up by 4.39%, or an extra $240,699 each year based on the average CEO salary of $5,482,910.
2. Changes in how people view last names are connected to big events, like Americans’ attitudes toward French and German last names dropping by 39.3% after these countries opposed the U.S.-led invasion of Iraq in 2003.
3. CEOs who didn’t start the company and haven’t been in charge for a long time are more affected by last name favorability, especially in companies where regular folks own most of the shares instead of big institutions.
4. CEOs with well-liked last names are way less likely to get fired for not doing well at their job.

The study also shows that last name favorability doesn’t have anything to do with a CEO’s business decisions, how well they communicate about the company, or how the company’s finances look. It also doesn’t link to CEOs being selfish.

Names matter

The researchers gathered the last names of CEOs of big U.S. companies between 1999 and 2014. They figured out how much people liked each last name using records of people who immigrated to the U.S. and surveys about what Americans think of other countries. Then, they matched these records with CEO pay and other details, looking at a total of 6,359 CEOs over the years.

The researchers worry that the study shows companies might make biased decisions based on last names, and this could lead to bad choices in hiring and paying CEOs.

“A CEO or indeed any employee’s compensation should reflect the skills and experience they bring to the role,” the researchers explain.

“However, it is clear from our study that an individual’s name and the attributes it carries—such as often being an identifier for race, gender, and ethnicity—has a significant impact on their level of earnings and job security.”

“This obviously has direct effects on individuals and their potential remuneration, but also risks influencing the performance of an organization if talent recognition and rewards are largely dependent on factors other than achievement.”