Is the hospitality industry more likely to reprice stock options?

Hospitality companies are known to be sensitive to the economy and movements in the market. When the overall performance of a company is poor because of a market-wide fall, hospitality managers should not be penalized for the decrease in the stock price. In such cases, it is acceptable to reprice the stock option to realign the incentives and to minimize the agency problem. This paper examines whether hospitality firms are more likely to reprice options after a stock price decrease that is accompanied by a market-wide fall. Although the overall results are consistent with prior literature, the hypothesis is marginally supported.