Top manager compensation in the restaurant industry

This research investigated the effect of top manager compensation on the financial performance of restaurant firms. This study chose share ownership and stock options to represent the compensation type of top managers. This research also examined the determinants of stock options in the restaurant industry. The sample was publicly traded restaurant firms. The sources of data were Compustat, Execucomp, Business week, and LinkedIn, which were investigated by adopting standard industry classification (SIC) code 5812. The study period was 1999-2013 and the number of restaurant firms was 34. The results suggested that share ownership negatively affected the value of restaurant firms, whereas stock options had a positive effect. The results suggested that organization size, investment opportunity, and internationalization of the restaurant had a positive impact on the decision to grant stock options.