Financial regulators may seek to curb the amount of bonus shares corporations give employees, addressing investor concerns that the issues undermine shareholder value, a Financial Supervisory Commission official said.
The commission will hold hearings soon on proposals to require companies to use market, not par, value in valuing bonus shares, said Wu Yui-chun (吳裕群), deputy chief of the commission's Securities and Futures Bureau. Another rule would limit bonus-share issues to the size of a company's profit in a given year. The combined effect of the two rules would scale back bonus share giveaways, Wu said.
"The planned move could protect shareholders' rights by preventing profit from being diluted," Wu said. "Most listed companies have welcomed the proposals, but probably their employees who have been benefited from the current system might oppose this."
Stock bonuses are popular among technology companies.
The TAIEX rose for the first session in five yesterday, led by technology stocks such as Taiwan Semiconductor Manufacturing Co (
The index rose 35.94, or 0.6 percent, to 5,845.69 on the Taiwan Stock Exchange. The index futures for October delivery rose 0.6 percent to 5,889.
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