TY - JOUR
T1 - Executive Compensation Structure and Firm Performance in the U.S. Restaurant Industry
T2 - An Agency Theory Approach
AU - Demirer, Ilhan
AU - Yuan, Jingxue (Jessica)
PY - 2013/11
Y1 - 2013/11
N2 - Executive compensation represents a small fraction of firm value, however, the way in which the dependence of compensation on firm performance is structured can have a significant effect on firm performance. The purpose of this study is to investigate the relationship between executive compensation structure and firm performance in the U.S. restaurant industry. Using executive compensation data for publicly traded restaurant firms for the period 1999-2010, our results suggest that compensation in the form of bonuses and nonequity affects restaurant firm performance positively. Results also reveal that compensation in the form of salary affects restaurant firm performance negatively. Findings of this study suggest that restaurant firms should use salary with discretion, and use bonuses and deferred pay to increase firm performance.
AB - Executive compensation represents a small fraction of firm value, however, the way in which the dependence of compensation on firm performance is structured can have a significant effect on firm performance. The purpose of this study is to investigate the relationship between executive compensation structure and firm performance in the U.S. restaurant industry. Using executive compensation data for publicly traded restaurant firms for the period 1999-2010, our results suggest that compensation in the form of bonuses and nonequity affects restaurant firm performance positively. Results also reveal that compensation in the form of salary affects restaurant firm performance negatively. Findings of this study suggest that restaurant firms should use salary with discretion, and use bonuses and deferred pay to increase firm performance.
KW - agency theory
KW - executive compensation structure
KW - restaurant industry
UR - http://www.scopus.com/inward/record.url?scp=84889667033&partnerID=8YFLogxK
U2 - 10.1080/15378020.2013.850374
DO - 10.1080/15378020.2013.850374
M3 - Article
AN - SCOPUS:84889667033
SN - 1537-8020
VL - 16
SP - 421
EP - 438
JO - Journal of Foodservice Business Research
JF - Journal of Foodservice Business Research
IS - 5
ER -