Comparative Study on the Regulatory Scheme of the Employee Stock Option—Role-Modeling the US Mode—

• Main Authors: Nai-Wen Hou, 侯乃文
• Other Authors: Yi-Hong Hsieh
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/7ccccv

碩士 === 中原大學 === 財經法律研究所 === 92 === Abstract In many countries,“Employee Stock Option”has been an effective incentive to make employees devotion themselves to their companies recently. In United States, it had resulted in the miracle of “Silicon Valley”, famous to the world. The adoption of this instrument made start-ups which don’t own much capital success. Once the companies go public, the prices of its stocks will rise. If the employees there were granted stock options before IPO, they’ll get benefits between grant prices and fair market prices. Besides, Internal Revenue Code provides tax advantages in this aspect if employees meet all requirements of Code. As a result, either corporation or employees also have a speculative appeal. Therefore, it has been a current trend to be compensation of employees, directors or executives in many corporations. In 2000, lawmakers enacted relative provisions of “Employee Stock Option” in Taiwan, wanting to attract excellent employees by learning experience of other countries. However, regarding laws is not good enough, like tax consequences of employees and corporations, to implement plans. In addition, when enact laws or regulations, lawmakers should pay attention to match existing employee-ownership systems in Taiwan and international statements to reform them. Consequently, this research focus on comparative study on “Employee Stock Option”—Role-Modeling the US Mode to be direction of law modification in Taiwan. The scheme of this study comprises nine parts as follows: ChapterⅠis a preface, illustrating the motives, methods, limitations and realm of this paper. Chapter Ⅱ contours the background of the “Employee Stock Option”, including the definition, nature, function, application field of this financial instrument. Chapter Ⅲ puts emphasis on regulatory scheme of “Employee Stock Option” in United States. It contains its history of legislative initiatives, legislative designation (Internal Revenue Code and Securities laws).By introducing integrated framework of “Employee Stock Option”, Taiwan’s lawmakers can regulate probably acts. Meanwhile, also briefly looks at some of the substantive provisions related securities law reporting requirements, including recent SEC rules expanding equity compensation disclosure requirements for public companies and discusses the issue of accounting resulting from Post-Enron. Chapter Ⅳ depicts recent changing landscape of “Employee Stock Option”. It includes the issues of shareholders approval considerations, reloads, evergreen provisions, underwater options, die or divorce, post-termination and Post-Enron. Chapter Ⅴ introduces other employee-ownership plans, which let employees become owners, not only employees such as pension plans, ESOP, 401(k),warrants, restricted stock plans, phantom stock and SARs. However, those differ from “Employee Stock Option”. Chapter Ⅵ focus on the provisions and practices of “Employee Stock Option” in Taiwan. It is intended to give the reader a general overview of how “Employee Stock Option”are used in Taiwan. Chapter Ⅶ analyzes when lawmakers will promulgate laws to regulate such a financial instrument, they need to consider current employee-ownership system in Taiwan and then enact or modify laws. Chapter Ⅷ compares the regulatory scheme of “Employee Stock Option” of United States with that of Taiwan. Chapter Ⅸ itemizes issues as well as propositions pertaining to remark a brief conclusion.