{'fraction_non_alphanumeric': 0.022813688212927757, 'fraction_numerical': 0.010456273764258554, 'mean_word_length': 5.122093023255814, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
Does Executive Equity-based Compensation Encourage Strategic Risk-taking?: Examining the Effects of Equity-based Compensation in the U.S. Restaurant Industry

Abstract The purpose of this study is to examine the effects of different forms of equity-based compensation on strategic risk-taking in the U.S. restaurant industry. Investigating the effects of equity-based compensation in the presence of agency problems is important as the divergence of risk preferences between managers and shareholders seems more prevalent in the U.S. restaurant industry. Using a sample of 532 firm year observations during the period 1992 and 2012, this study examined the relationship between the two types of stock options and risk-taking behaviors of managers in both gain and loss domains. The findings of this study could contribute to the alignment of the risk preferences between managers and shareholders by providing a more holistic understanding of the relationship between equity-based compensation and strategic risk-taking in the U.S. restaurant industry.