ESO ECRY

ESO ECRY - A Study of Employee Stock Option Pricing in...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
2008/4-25 Seminars on Financial Mathematics and Financia A Study of Employee Stock Option Pricing in Taiwan by Ling-Chu Lee, Ming-Chun Wang and Chia-ying Chan*
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2008/4-25 Seminars on Financial Mathematics and Financia Objectives What are Employee Stock Options (ESOs)? ESOs in Taiwan Pricing ESOs: With and Without Restricted Exercise Price Factors that Determine the Imposition of Restricted Exercise Price on ESOs
Background image of page 2
2008/4-25 Seminars on Financial Mathematics and Financia What are the Employee Stock Options (ESOs)? A right to buy underlying shares at a certain price during a certain interval To Firm Employees: 1) Salary Compensation/Remuneration 2) Incentive/Motivation 3) Employee=Shareholder
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2008/4-25 Seminars on Financial Mathematics and Financia Practice of various incentive schemes In Taiwan Cash bonus Share bonus Employee Stock Options Treasury Shares Interest from Shareholder Trust
Background image of page 4
2008/4-25 Seminars on Financial Mathematics and Financia What are the ESOs To Corporate finance perspective: Share Bonus Vs. Employee Share Options The Former: 1) Short Term /Long Term Incentive Scheme 2) Depends Upon Past Performance The Latter: 1) Long Term Incentive Scheme 2) Depends Upon Post Performance
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2008/4-25 Seminars on Financial Mathematics and Financia The Issue of ESOs Furthermore, the issue of the ESOs implies the potential change of company ownership [1] and capital structure [2] , which brings a large impact on the firm. [1] The exercise of ESOs means an increase and diversification of the number of firm shareholders. [2] The exercise of the ESOs may bring so-called dilution effects to the firm inducing the change of capital structure.
Background image of page 6
2008/4-25 Seminars on Financial Mathematics and Financia The Impact of Issuing of ESOs in Taiwan Merits Better than share bonus from reporting prospective Incentive scheme Demerits Dilution of the revenue Income tax to the employees by exercising the options Possible manipulation effect
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2008/4-25 Seminars on Financial Mathematics and Financia The History of ESOs US: The first inception happened around 1990s’. The ESOs is considered as “ Incentive Scheme”. Japan: 1997. Both managers and employees are eligible for the incentive scheme. Germany: 1996. Likewise. Taiwan: 2000. ESOs are allowed to set restricted exercise. Generally follow the FASB 123 reporting. Most of ESOs have lack up period.
Background image of page 8
2008/4-25 Seminars on Financial Mathematics and Financia The Issue of ESOs In Taiwan 2000: Listed firms were allowed to issue employee stock options. 2007: The adoption of the ESOs schemes should follow Fair price valuation and report as expenses. 1.
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 37

ESO ECRY - A Study of Employee Stock Option Pricing in...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online