Hayward and Hambrick were right on all counts. As each of these three factors increased, so did the tendency of a CEO to pay a higher premium for an acquisition. As one example, they found that for every favorable article written in a major publication about the CEO, the acquisition premium paid went up by 4.8%. That’s a $4.8 million boost on a $100 million acquisition! Because of one flattering article! And a second article would inflate it by another $4.8 million.
