The Relationship between Employee Bonus Composition and Firm Performance after Expensing Employee Bonus

• Main Authors: Hu, Weinan, 胡威男
• Other Authors: 朱炫璉
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/34195609221422900331

碩士 === 國立臺北大學 === 會計學系 === 99 === Employee bonus plan is a powerful tool for encouraging and attracting talents in high technology industries. However, expensing employee bonus would affect the incentive of employee bonus plan. All list companies are facing on serious trials of decreasing in profitability, loyalty of employees and brain-drain problems. Therefore, how to balance employee cash bonus and stock bonus is a challenge to managers. This study selects list companies in our country (except finance and insurance companies) during 2008~2010 as sample period. By forming quartiles based on total bonus, I examine the the relationship between the bonus composition and firm profitability in quartile 4. The result indicates that the relationship between cash bonus ratio and firm performance is positive after expensing employee bonus. In other words, after expensing employee bonus, employee bonus plan still has incentive effect and the incentive of cash bonus is better than stock bonus. According to this, it is reasonable to explain that after expensing employee bonus, company chooses to pay cash bonus instead of stock bonus. This study result not only to cover insufficient documentation by using strict case analysis but also can provide company management’s reference for choosing cash bonus or stock bonus after expensing employee bonus. Thus employee bonus can make its maximum beneficial to avoid the situation that decrease employee bonus but cannot increase firm performance and it also can reduce the impact of expensing employee bonus.