Compensation of airline chief executive officer and firm-employee relationship

The purpose of this research is to examine the determinants of firm–employee relationship decisions of airlines. This study adopted the upper echelon theory as the theoretical foundation. The chief executive officer (CEO) represents the upper echelon of airlines. Various data sources are used in this research, including KLD, COMPUSTAT, and EXECUCOMP for the data collection. The study period is 1998–2013. A two-way fixed-effect model was the main instrument to analyze the data. The results indicated that cash compensation encourages CEOs to serve for the benefits of employees, whereas share ownership discouraged CEOs to serve for the benefit of employees.