The Impact Of Employee Stock Bonus On Equity Market Value

Abstract

This paper explores the relation between equity market value and the expense of employee stock bonus that is disclosed but not recognized under Taiwan’s law. Employing the regression analyses, and to investigate the effects of employee stock bonus on the firm’s share price. We find that the market value of employee stock bonus has a negative effect on the firm’s share price. The result indicates the negative side of employee stock bonus is its dilution of the existing shareholders’ equity rights.