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Authentic crisis leadership & employee motivation: Comparing divergent COVID-era executive compensation strategies in the cruise line industry
Lewis, Tony Shackman, Joshua
Lewis, Tony
Shackman, Joshua
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Issue Date
2025-10
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Article
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Keywords
Authentic leadership,Employee motivation,Crisis management,Executive compensation,Rent extraction,Signaling,Efficient contracting
Subjects (LCSH)
Citation
Lewis, T., Shackman, J. (2025). Authentic crisis leadership & employee motivation: Comparing divergent COVID-era executive compensation strategies in the cruise line industry. Journal of Management & Engineering Integration, 18(2), 58-71. https://doi.org/10.62704/10057/31194
Abstract
The COVID-19 pandemic exposed the cruise line industry to an unprecedented crisis. Recovery required sustained discretionary effort from employees, simultaneously balancing safety concerns and extreme financial hardship. However, not all firms in the industry were affected equally. From January 2019 to January 2025, among the three dominant players in the industry, Norwegian Cruise Lines (NCLH) and Carnival Cruise Lines (CCL) saw their stock prices drop by approximately half. During the same period, Royal Caribbean Cruise Lines (RCL) achieved extraordinary stock market performance, more than doubling their 2019 valuation. This inductive study explores whether generous executive pay increases awarded during the COVID-19 crisis may have diminished managers’ abilities to engage in authentic leadership (AL). Conceptual findings raise questions about whether the absence of rigorous AL may undermine employee motivation, resulting in depressed firm performance. Emergent themes primarily conform with the rent extraction and signaling views of executive compensation. Little support for the efficient contracting view is detectable. Inauthentic executive messaging and perceived executive opportunism at NCLH and CCL were associated with reduced employee motivation and poor share price performance, despite a full market rebound. In contrast, RCL’s more congruent executive actions and communications were accompanied by a stronger recovery aided by higher employee productivity. This analysis contributes to the AL literature by illustrating how compensation practices can constrain authentic communication and leadership efficacy in crisis situations. Implications for corporate governance, organizational resilience, and leadership development are discussed.
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Description
Published in SOAR: Shocker Open Access Repository by the Wichita State University Libraries Technical Services, October 2025.
Publisher
Association for Industry, Engineering and Management Systems (AIEMS)
Journal
Book Title
Series
Journal of Management & Engineering Integration
v.18 no.2
v.18 no.2
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Archival Collection
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ISSN
1939-7984