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ABSTRACT
The purpose of this research is to assess the elasticity of CEO compensation in the U.S. restaurant industry. Using a sample of 30 restaurant firms for the years 1993 through 2006, we find that a 1 percent increase in current year firm return yields an increase of approximately .43 percent for salary bonus, and stock options, .20 percent for salary and bonus, and 2.74 percent for bonus and options. Mergers do not appear to affect CEO compensation significantly. Our findings are within the range found by many previous researchers.