The Effects of Non-Expensed Employee Stock Bonus on Firm Performance: Evidence from Taiwanese High-Tech Firms

• Autores: Nien-Chi Liu, Ming-Yuan Chen, Mei-Ling Wang
• Localización: British journal of industrial relations, ISSN 0007-1080, Vol. 54, Nº. 1, 2016, págs. 30-54
• Idioma: inglés
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• Resumen

  • The choice of whether to expense broad-based stock incentives has been a highly controversial debate in both academic research and practice circles. We provide insightful findings to reconcile certain debates regarding the effectiveness of non-expensed, broad-based stock incentives. Using a unique longitudinal dataset from Taiwanese high-tech firms over the 1997–2008 period, our results indicate that non-expensed employee stock bonus incentives exerted positive effects on short-term organizational value added creation. The dilution effects of broad-based stock incentives in Taiwan, however, exerted a negative influence on profitability and eroded share return. The negative effects were even more severe in the following year, and overexploitation of employee stock bonus also damaged the long-term organizational performance of Taiwanese high-tech firms. This negative aspect of non-expensed employee stock incentives resulted in more evidence for changing the regulatory context of broad-based stock incentives in Taiwan.