The Impacts of Expensing Employee Profit Sharing Bonus on Compensation System in Taiwan Electronic Industry
|關鍵字:||員工分紅;實質所得;課稅所得;employee stock bonus system;real income;taxable income|
Abstract In the past two decades, by utilizing the employee stock bonus system to attract lots of excellent employees joining the technology industry, Taiwan technology industry has not only helped Taiwan to achieve high economic growth in that period, but has also made Taiwan an important production site in the global semiconductor industry and also made itself an important player in the technology industry. In the past, studies related to employee stock bonus system are largely focused on its influences on company’s stock price, financial performance and returns to investors’ investment. As a result of globalization, Taiwan government regulated that, effective from Jan 1, 2008, employee profit sharing should be recognized as expenses, not as earning appropriation, in order to connect with international financial accounting principles and attract global capital. This change has made considerable impacts on companies and employees. This study mainly focuses on the impacts of this policy change on employees’ real income from the viewpoint of practice... This study will also suggest some plans for enterprises to effectively react to the change This study selected 10 representative technology companies as the research samples and collected these companies’ financial information from the website of Market Observation Post System. This study also summarized, simulated and analyzed these companies’ programs for the new accounting principle. The findings and results are summarized as follows: 1. employees’ real income will decrease by 50.28% to 82.66% if the company doesn’t take any action to it. 2. if companies adopt any combinations of the following programs, increasing the percentage of employee profit sharing, pay raise, buying back shares and transferring the shares to employees and issuing employee stock options etc., to react to the new accounting principle sure may reduce the impact of the new regulation. However, according to this research, even though some companies in the study substantially increased their employee profit sharing percentage and raised employees’ salary by 20%, employees’ real income still decreased in 70% of the companies. Among the company investigated, only 30 % of the companies can compensate their employees successfully . The effect of employee stock bonus system on motivating employees is tremendous and effective. Without this incentive program, the companies have to substantially increase the percentage of employee profit sharing and employees’ salary in order to maintain employees’ real income. This will result in much higher expense and lower earnings per share, and inevitably hurt shareholders’ equity. As for the impacts on the competitiveness of Taiwan industries and human resource market, since the new policy is just put in practice for a short period and financial crisis also happened in that period, we do not have sufficient evidences to make a proper judgment about its impacts. Nevertheless, in order not to unfavorably impact companies’ competitiveness, companies’ policy makers must draw up a thorough and appropriate program to respond to the new policy. By making proper responses to the change, the Taiwan industries can continue to play an important role in the international arena.
|Appears in Collections:||Thesis|