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

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  • Trinh, Vu Quang
  • Seetaram, Neelu

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.

Suggested Citation

  • Trinh, Vu Quang & Seetaram, Neelu, 2022. "Top-management compensation and survival likelihood: the case of tourism and leisure firms in the US," Annals of Tourism Research, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:anture:v:92:y:2022:i:c:s0160738321002012
    DOI: 10.1016/j.annals.2021.103323
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    Cited by:

    1. Batara Surya & Hernita Hernita & Agus Salim & Seri Suriani & Iwan Perwira & Yulia Yulia & Muhlis Ruslan & Kafrawi Yunus, 2022. "Travel-Business Stagnation and SME Business Turbulence in the Tourism Sector in the Era of the COVID-19 Pandemic," Sustainability, MDPI, vol. 14(4), pages 1-37, February.
    2. Vu Quang Trinh & Neelu Seetaram & Kiet Tuan Duong & Xuan Vinh Vo, 2023. "Collusive behaviour, risk and performance of tourism firms," Tourism Economics, , vol. 29(8), pages 2103-2128, December.
    3. Fangjun Wang & Lizhu Ma & Baojun Gao & Yang S Liu, 2024. "Does high-speed railway affect the cost behavior of tourism firms? Evidence from China," Tourism Economics, , vol. 30(1), pages 212-235, February.
    4. Vu Quang Trinh & Aly Salama & Teng Li & Ou Lyu & Savvas Papagiannidis, 2023. "Former CEOs chairing the board: does it matter to corporate social and environmental investments?," Review of Quantitative Finance and Accounting, Springer, vol. 61(4), pages 1277-1313, November.
    5. Trinh, Vu Quang & Kara, Alper & Elnahass, Marwa, 2022. "Dividend payout strategies and bank survival likelihood: A cross-country analysis," International Review of Financial Analysis, Elsevier, vol. 81(C).

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