||Whether Low-paid Enterprise Use Treasury Stock to Reward Employees?
||Department of Accountancy
Today, in a more competitive global environment, talent is an important factor for firms to sustain competitiveness. It is very helpful in attracting and retaining talent by establishing a complete salary system. However, low-paid firms may not provide an effective motivation to attract and retain talent due to the low pay, and thus it may cause the loss of talent, and decrease firm competition. Therefore, using incentives to motivate and attract employees becomes an important issue. In Taiwan, there are six kinds of employee incentives, including cash bonuses, stock bonuses, new share subscription rights, employee stock options (ESOs), treasury stocks, and restricted stocks, each of which has its own functions and features. In the past, firms tended to use stock bonuses to reward employees in Taiwan. However, the era of expensing employee bonuses starts from 2008. Thus the number of bonuses granted to employees is decreased and the number of using other incentives is increased. Compared with other stock-based incentives, using treasury stocks to reward employees has the advantages not only on avoiding the miscellaneous programs and high cost of issuing new stocks, but also preventing the diluted effect on shareholder equity due to granting employee stock-base incentives. Thus, the objective of this paper is to analyze whether low-paid firms use treasury stocks to reward employees, in particular, the probability and the amount of treasury stocks used by low-paid firms to reward their employees are discussed.
CHAPTER 1 INTRODUCTION 1
1.1 The Background and Motivation 1
1.2 Employee Incentives in Taiwan 4
1.3 Research Purpose 9
1.4 Open-market Repurchase in Taiwan 10
1.5 The Framework of This Study 12
CHAPTER 2 LITERATURE REVIEW 12
2.1 Motivation for Employee Compensation 12
2.2 Motivation for Stock Repurchases 15
CHAPTER 3 HYPOTHESES DEVELOPMENT AND RESEARCH DESIGN 20
3.1 Hypotheses Development 20
3.2 Research Design 24
CHAPTER 4 EMPIRICAL RESULTS AND ANALYSES 37
4.1 Descriptive Statistics 37
4.2 Univariate Tests 38
4.3 Correlation Analyses 40
4.4 Empirical Results of Hypothesis 1 and Hypothesis 3 42
4.5 Empirical Results of Hypothesis 2 and Hypothesis 3 45
4.6 Additional Tests and Analyses 47
CHAPTER 5 SUMMARY AND CONCLUSION 51
5.1 The Conclusion of This Study 51
5.2 The Contributions of This Study 53
5.3 The Limitations of This Study 54
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