| Summary: | 碩士 === 國立交通大學 === 管理學院碩士在職專班財務金融組 === 99 === This research studies the relationship between employee profit sharing and firms’ equity value. As employee profit sharing structure integrates interests of both shareholders and employee so that both parties share a common goal, there will be motivational effect; however, on the other hand, if employee profit sharing means transferring shareholders’ rights to demand profits to the employees, a case of stock dilution effect may be in place. This research utilizes an empirical investigative model to study the factors influencing firm equity value by considering the joint effects of motivation and dilution. By taking both factors into account, this research attempts to find out whether investors consider employee profit sharing as a company expense, prior to and after the introduction of the new accounting rule that treats the employee bonus as an before-tax expense. The results indicate that in both cases:
1. When the incurred agency cost is high and human resource becomes scarce, employee profit sharing could have a significant impact on motivation;
2. After segregating interests between employee profit sharing and those of investors, employee profit sharing is regarded as company expense;
3. The negative correlation between employee profit sharing and equity value is more significant than that of usual salary expense.
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