Since winter 2000, America corporates had exploded lots of accounting scandals：still then how to fix the accounting principle became a broadly debated issue. Recently, American Financial Accounting Standard Board has determined that the employee stock options must be recorded as operating expense by a company’s market value since 2006. However, if the employee stock bonus prevailing in Taiwan’s high-tech companies also must be expensed, then it would be a great impact on Taiwan’s high-tech stocks’ prices.
In our study, we try to use the after stock dividend prices and the average stock prices in December 2003 and December 2004 of Taiwan’s listing high-tech companies to understand the effects of expense employee stock bonus in those firms. Second, we utilize step-wise regression to extract the dominant variables affecting the rate-of- return of the high-tech stocks in practice. Then we want to find out whether employee stock bonus imposes negative influence on stock price. When employee stock bonus ratio is a significant variable, we try to figure out the specific value of the negative effect on rate of return. Finally, we take account of the expense of employee stock bonus, re-calculate the ten financial variables and rerun the step-wise regression. We would like to know whether the significance of employee stock bonus ratio would be persistent or not.
According to the empirical results, after expense of employee stock bonus, some firms’ profits even reverse to net loss. Moreover, in 2003 and 2004 , the IC design, the electronic components, and the electronic vender are the top three leading sub- electronic industries which most engage in executing the employee stock bonus. What surprises us is the electronic vender ranking third in the list, because this industry doesn’t need as many research employees as other high-tech companies do. Furthermore, the outcome of step-wise regression shows that the earnings per share is significant in three of the two years in both the public and over the counter markets. It indicates that the earnings per share is a vital variable when we evaluate the value of investment in Taiwan’s high-tech stocks. Even the employee stock bonus is expensed in two ways, the earnings per share is still significant in the adjusted regression model in the public market. In addition, although the employee stock bonus will influence the rate of return only through the feedback effect, we still find out the rate of return of some high-tech companies almost evaporates away.