Sustainable Development Pressure and Executive Accountability: Adoption of Sustainability Compensation Incentives in Tourism and Hospitality

This study examines when sustainability commitments become formal executive accountability arrangements through the adoption of sustainability compensation incentives (SCI) in the global tourism and hospitality (T&H) industry. The theoretical problem is not simply whether firms adopt another ESG practice, but why sustainability salience is sometimes formalised in executive pay and sometimes remains decoupled from remuneration. Drawing on institutional theory and managerial hegemony theory, the study develops a pressure–resistance account in which legitimacy demands favour formalisation, whereas managerial discretion and organisational constraints can impede it. Using 1406 firm-year observations for 282 listed firms across 49 countries during 2018–2023, the analysis estimates two-way fixed-effects linear probability models. Contemporaneous ESG, environmental and social scores are positively associated with SCI adoption, but lagged ESG is not statistically significant in the preferred fixed-effects specification. Compensation-specific shareholder voting shows the largest association, although its institutional proximity to SCI requires cautious interpretation. Board independence is weakly positive, audit committee independence is insignificant, and leverage and firm size are negative. The evidence therefore identifies correlates of formalisation rather than causal effects or implementation quality.