In general, there are no great surprises in the coefficients on the control variables. The strongest finding is the powerful negative relation between firm size and firm volatility, a result which is well known. Additionally, we find a strong positive relation between the value of CEO stock and option holdings and firm volatility. This result is somewhat surprising, in that we might expect that the risk aversion of executives would cause those with greater firm holdings to reduce firm volatility. This result, however, disappears when we control for firm and year fixed effects (see discussion below). Cash compensation (salary plus bonus).
