The Relationship Between Stock Bonus Schemes and Stock Price

• Main Authors: CHIA JUNG, YEH, 葉家榮
• Other Authors: Jan-Zan Lee, Ph.D.
• Format: Others
• Language: zh-TW
• Published: 2003
• Online Access: http://ndltd.ncl.edu.tw/handle/33152604676966461124

碩士 === 國立臺北大學 === 會計學系 === 91 === The stock bonus scheme may deduct stockholders’ wealth, so the accounting theory advocates recognizing it as expense. In practice, however, it is treated as distribution of earning according to the law. In spite of the difference between the accounting theory and practice, the difference is not material if investors can realize the information content of the stock bonus scheme and treat it as expense. On the contrary, we must require the Generally Accepted Accounting Principle of Taiwan to recognize the stock bonus scheme as expense if investors cannot do it. Therefore, the purpose of the study is to understand whether the investors have ability to realize the information content of the stock bonus scheme. In addition, the study also examine if cash bonus schemes and director compensation should be treated as expense. The Ohlson and Eston and Harris models are used in the study. The sample contains 3,795 observations for Ohlson model and 2,890 observations for Eston and Harris model during 1992 to 2001. The empirical results indicate that （1）The investors cannot realize the information content of the stock bonus scheme. （2）The influence of cash bonus schemes and director compensation may be little for investors, so they neglect the diluting effect of cash bonus schemes and director compensation. （3）The increment of cash bonus schemes and director compensation may provide incentive for employees to increase the investors’ wealth , so they regard it as good news.