In Charisma We Trust: The Effects of CEO Charismatic Visions on Securities Analysts

Abstract

Using a thematic text analysis of the initial letters to shareholders following a CEO succession event, we analyze whether CEO charismatic visions portrayed in this organizational discourse influence securities analysts' recommendations and forecasts. The results suggest that such projections of CEO charismatic visions are associated with the favorability of individual analyst recommendations and the uniformity of recommendations across analysts, but they also appear to be positively related to errors in individual analysts' forecasting of future firm performance.