Determinants of CEO compensation in the US airline industry

초록

Airline industry is characterized by sensitivity to economic and political condition and relatively high barriers to entry. It requires capable top managers and compensation is a way to control the manager. This research thus investigates the determinants of CEO compensation in the US airline industry. CEO compensations include cash compensation, bonus, and equity compensation. The study period is between 1999 and 2013. The data is mainly derived from Compustat and Execucomp using standard industry classification code (SIC) 4512. The independent variables include CEO characteristics (age, tenure, MBA degree holding), organizational size, leverage, return on assets, and market to book value. The cash compensation is positively predicted by tenure and organizational size, whereas it is negatively predicted by CEOs holding MBA degree. Bonus is positively influenced by market based performance. Equity compensation is positively affected by age of CEOs.

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