| Budget Amount *help |
¥3,200,000 (Direct Cost: ¥3,200,000)
Fiscal Year 2002: ¥500,000 (Direct Cost: ¥500,000)
Fiscal Year 2001: ¥600,000 (Direct Cost: ¥600,000)
Fiscal Year 2000: ¥1,000,000 (Direct Cost: ¥1,000,000)
Fiscal Year 1999: ¥1,100,000 (Direct Cost: ¥1,100,000)
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| Research Abstract |
The reaction of the share price was examined for the listed corporations at the First Section of the Tokyo Stock Exchange that approved the resolution to grant treasury stock type stock options at the shareholders' meeting by the end of September 1997. There were fifteen corporations. The average abnormal return on the next trading day of the directors' meeting that approved the adoption of stock option plans was not statistically significant. Instead of limiting samples to the first fifteen corporations, the abnormal returns was calculated in the same manner for eighty four samples, which introduced stock option plans and/or quasi-stock option plans by 1998. By increasing the number of data, abnormal returns became significant.
It was on May 28, 1997, when the recommendation for timely disclosure was issued from Tokyo Stock Exchange. However, by then, thirteen corporations among the first fifteen corporations have already approved to introduce stock options at the directors' meeting. S
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o the next day of the directors' meeting was not the correct event day. By using the announcement date instead of the next day of the directors' meeting, significant t value can be observed even for the first fifteen corporations. The amendment of the rule for the timely disclosure could not catch up with the speed of the amendment of the Commercial Code, which caused in some kind of confusion in the capital market. As the adoption of stock option plans in the compensation program in the company seems to be a good news, which should be released timely in order to avoid the confusion in the capital market.
In 2001, Japanese Commercial Code was amended to combine the articles that regulates convertible bonds, bonds issued with stock purchase warrants, and stock options, as those are all call options issued by the company. Although the Commercial Code no longer limits the number of stock options to be granted, the restriction to be eligible for the preferential treatment for the income tax seems to restrict the number of stock options to be granted to the employees. Less
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