Top-management compensation and survival likelihood: the case of tourism and leisure firms in the US

Vu Quang Trinh and Neelu Seetaram

Annals of Tourism Research, 2022, vol. 92, issue C

Abstract: This study examines the impact of top-management compensation on the survival likelihood of publicly listed firms in the tourism and leisure sector, and the mediating effect of profit distribution policy on that relationship. It uses a panel dataset of 55 US listed S&P1500 firms from 2006 to 2019. The analyses show that firms with higher top-management compensation packages exhibit a significantly lower risk of bankruptcy through higher levels of retained earnings. The findings support the agency and incentive alignment theories. They offer new and strong empirical evidence on the links between compensation, corporate governance and financial risks. The policies derived can be implemented to increase the probability of survival of tourism and leisure firms in the US.

Keywords: Top-management compensation; Profit distribution policy; Survival; Altman-Z scores; Mediating effect; US (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:anture:v:92:y:2022:i:c:s0160738321002012

DOI: 10.1016/j.annals.2021.103323

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