Dividend payouts spur controversy

The government never raises the issue because, according to statements issued by the regulatory Securities and Futures Commission (證期會), all investors have the opportunity to vote and oppose stock bonuses during open shareholder meetings.

While all stock-related decisions must be filed with the commission, since the actions are made with shareholder consent, they are technically legal.

But international trade groups balk at the fact Taiwanese firms don't have to list the employee bonus as an expense.

Questionable accounting practices in this area are one of the reasons that the International Trade Commission sometimes claims Taiwan dumps products -- selling them below cost in order to clear up inventories.

Since employee bonus shares never show up as expenses, Taiwan's cost structure is often deceptively low. This can trigger complaints from foreign competitors when they feel that imports are being sold below market value. The result of such complaints can lead to trade sanctions against Taiwan.