Does Firm Performance Impact Perquisite Usage? Evidence From Flights of Corporate Jets

Abstract

This paper studies the connection between firm performance and the utilization of perquisites, focusing on the impact of equity returns and the fluctuations of financial ratios on corporate jet flight activity. Our regression analysis shows that prior equity performance significantly influences flight activity to external locations of large firms in the sample. The findings suggest that the nonpecuniary benefits of corporate jet travel are a contributing factor to agency costs, particularly in instances related to firm size and the destination of the trips. These insights contribute to a deeper understanding of the complex factors influencing corporate decision-making and governance practices.