The choice of whether to expense broad-based stock incentives has been a highly controversial debate in both academic research and practice circles. We provide insightful findings to reconcile certain debates regarding the effectiveness of non-expensed, broad-based stock incentives. Using a unique longitudinal dataset from Taiwanese high-tech firms over the 1997–2008 period, our results indicate that non-expensed employee stock bonus incentives exerted positive effects on short-term organizational value added creation. The dilution effects of broad-based stock incentives in Taiwan, however, exerted a negative influence on profitability and eroded share return. The negative effects were even more severe in the following year, and overexploitation of employee stock bonus also damaged the long-term organizational performance of Taiwanese high-tech firms. This negative aspect of non-expensed employee stock incentives resulted in more evidence for changing the regulatory context of broad-based stock incentives in Taiwan.