Impact of dividend-protected employee stock options on payout policies: Evidence from Taiwan

Ming-Cheng Wu, Erin H.C. Kao, Hung Gay Fung

Research output: Contribution to journalArticle

1 Citation (Scopus)


This study used a sample of 1035 Taiwanese firms to examine the impact of dividend protected employee stock options on stock repurchase and cash dividend policies from 2000 to 2005. This study finds a positive relationship between cash dividends and executive options, implying that executives holding stock options might prefer to distribute cash dividends to boost the stock price. This result, unlike in earlier studies, arises from the dividend protected characteristic of Taiwanese employee stock options. Finally, free cash flow, firm profitability, level of debt, investment opportunities and firm size are found to considerably influence payout decisions.

Original languageEnglish
Pages (from-to)431-452
Number of pages22
JournalPacific Economic Review
Issue number4
Publication statusPublished - 2008 Oct 22


All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Development
  • Aerospace Engineering

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