Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
CEOs’ option-based compensation and discussions about political risk (risk-talking) in successive earnings conference calls are significantly positively associated. This effect is more significant in the subsample of firms with less equity price volatility and poor investment risk-taking (lower capital expenditure). Furthermore, seven out of eight components of risk-talking are positively related to CEOs’ option-based compensation. These findings suggest that CEOs with more options in compensation packages are likely to find discussing political risk during corporate earnings calls as a viable alternative to boost proxies of risk-taking outcomes (such as equity price volatility), especially when they perceive risk-taking expectations to be untenable.