Determinant and incentive effect of employee stock bonus policy: evidence from Taiwan

Chia-Hui Chen and Lyuh-Yi Lin

International Journal of Accounting and Finance, 2008, vol. 1, issue 2, 121-148

Abstract: Comparing 341 public companies that did not implement employee stock bonus policies with 317 that did during the period from 1989 to 2006, the study identifies that the factors significantly influencing decisions on the percentage of after-tax surplus profits to be distributed as employee stock bonuses include managerial ownership, independent directorship, operational risk, firm size, growth opportunity, and industry characteristics. A non-linear relationship between this decision on the percentage of after-tax surplus profits to be distributed as employee stock bonuses and agency cost was found. The results contradict previous findings indicating weak incentive effect of implementing employee stock bonus policy.

Keywords: employee stock bonuses; after-tax surplus profits; agency costs; incentive effects; Taiwan; bonus policy. (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ids:intjaf:v:1:y:2008:i:2:p:121-148

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