GET your binoculars and long lenses out, it pays to keep a close eye on the personal lives of the chief executives, according to a growing body of academic research. Dead mothers-in-law are good for business, big houses are bad. We await with bated breath the impact of trophy wives on the bottom line.

One recent study by three Danish finance professors looked at whether large changes in a CEO’s life had an effect on a business’s performance.

Profitability slid by about one-fifth, on average, in the two years after the death of a CEO’s child, and by about 15% after the death of a spouse. The death of an executive’s mother-in-law led to a slight rise in profitability.

The Danish study, made possible by the Danish government’s spooky obsession with keeping tabs on its people’s private lives, is one of a number that has put the personal lives of executives under the microscope.

Given the rise of the celebrity CEO, perhaps it’s not surprising that they are getting the “star” treatment. So far, the most famous study of personal foibles and profit has come from finance professors David Yermack and Crocker Liu. They looked at the relationship between stock performance and the size of a CEO’s home. Call it hubris, but they found that the bigger or pricier the house the worse the returns to shareholders.

At the end of 2004, the professors looking up the addresses of 432 CEOs in the S&P 500 found that 12% of them lived in homes of at least 10,000 sq ft, or on a minimum of 10 acres. In 2005, shares in the mega-mansion CEO’s companies lagged behind those living in smaller houses by an average of 7%.

Among the high-living, underperforming bosses was Robert Nardelli, the former boss of the DIY giant Home Depot, who clashed repeatedly with shareholders over his outsized pay and poor performance. Nardelli bought a 19,000 sq ft Atlanta mansion and spent lavishly to expand it as Home Depot’s shares tanked.

Two Pennsylvania State University professors recently attempted to get to the heart of the issue and rate CEOs of technology companies on their degree of narcissism. The use of the first-person singular in interviews and the size of executives’ photos in annual reports were among the factors they took into account. The study, called, It’s All About Me, found narcissistic CEOs tended to take far bigger risks than more self-effacing peers.

All this personal scrutiny raises some thorny privacy questions. To what extent are CEOs public figures? Should their lives be plumbed like those of movie stars? Perhaps the business sections of newspapers should be closer to Heat than the FT, with paparazzi following business leaders around.

The good news for executives is that the studies conclude that chief executives do matter to their companies’ performance. The bad news is that what they do outside the boardroom matters too.

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