| Summary: | 碩士 === 中原大學 === 會計研究所 === 100 === Abstract
Article 64 in Business Accounting Law in Taiwan was revised on May 24, 2006, and expensing employee bonus on January 1, 2008. This study investigates the impact of employee bonus on firm value after expensing employee bonus. The purpose of this study is to examine (1) whether the incentive (diluted) effect of employee bonus is more pronounced after expensing employee bonus? (2) Can the market investors rationally reflect the information of employee bonus after expensing employee bonus. (3) Whether the growth opportunities influence the relation between employee bonus and firm value? Study samples are from listed and over-the-counter companies in Taiwan using data from 1996-2010.
The empirical results show that (1) In the full sample or high-growth subsample, the incentive effect of employee cash bonus on the firm value is more pronounced after expensing employee bonus. (2) In the low-growth subsample, the diluted effect of employee cash bonus and employees stock option on the firm value is more obvious after expensing employee bonus. That means the market investors toward employee bonus for the different growth companies have different evaluation.
This study further examines that whether market investors rationally reflects the information of employee bonus after expensing employee bonus. Empirical results find that (1) After expensing employee bonus, financial statements correctly express the company financial position and operating results, thereby improving the information quality of financial statements. The market investors rationally reflect the information of employee cash and stock bonus and remuneration of directors and supervisors after expensing employee bonus in full sample. (2) In the high-growth subsample, the market investors overprice the information of employee cash bonus after expensing employee bonus. The empirical results indicate that the market investors overestimate firm value because of high future investment opportunities. Therefore, the market investors overprice the employee bonus information. (3) In the low subsample, the market investors underprice the information of employee’s stock option after expensing employee bonus. The empirical results indicate the market investors give the low evaluation because of low future investment opportunities. And the market investors are modify the stock price and profitability. Therefore the market investors underprice the employee bonus information.
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