 U.S. airline responses to mandated disclosure of non-financial performanceXiaozhe Gu, Nandu J. Nagarajan, Akin Sayrak and Dhinu Srinivasan Journal of Contemporary Accounting and Economics, 2024, vol. 20, issue 1 Abstract: This paper provides evidence on US airlines’ responses to the U.S. Department of Transportation’s (DOT) mandated disclosure of non-financial performance. We find that while all three DOT measures are associated with customer complaints, airlines are more likely to improve on-time performance rather than mishandled bags and ticket over-sales following poor prior period performance. We also find that on-time performance is the only DOT measure that is associated with future accounting performance and is significantly associated with CEO compensation after controlling for financial performance and load factor. We also provide preliminary results to show that airlines incorporate the more informative component of the on-time measure in CEO compensation. Overall, we provide new understanding of how organizations react to the disclosure of non-financial performance and use incentives to improve these measures. Keywords: CEO compensation; Incentive contracts; Pay-for-performance; Non-financial performance measures; Airline industry (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:20:y:2024:i:1:s1815566923000449 DOI: 10.1016/j.jcae.2023.100394 Access Statistics for this article Journal of Contemporary Accounting and Economics is currently edited by Agnes C.S. Cheng, P. Clarkson, F.A. Gul, Zoltan Matolcsy, Dan Simunic and Ben Srinidhi More articles in Journal of Contemporary Accounting and Economics from Elsevier |
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