| Equity-based compensation model is world-widely used to reduce agencyconflicts between shareholders and managers and employees. In Thailand,many firms adopt employee joint investment program (EJIP) as incentiveprogram of employees. This dissertation would aim at examining theconsequences of EJIP adoptions into two prospects, market reaction andimprovement of the firms’ operating performance. In terms of marketreaction, this research used average abnormal return (AR) and cumulativeabnormal return (CAR) on stocks of EJIP firms for short-term period,representing investors’ perspective to EJIP adoption’s news. Another prospectis accounting performance, which is measured as return on assets (ROA) andreturn on equities (ROE) of EJIP adoption firms by comparing pre and postof EJIP adoptions. This research also examined the consequences ofaccounting performance improvement between EJIP adoption firm and non-EJIP adoption firms by consideration of same size of firms, same industries,and same businesses. Moreover, case study method is used to show the wholeprocesses of EJIP adoption and the consequences of EJIP adoption into twoprospects by using qualitative research method, instrument and technique ofdata collection including interview employees or management directors ofthe listed companies.The research finds that EJIP could not only create a sense of ownership,but also be alternative remuneration tool to employees. The case studies ofthe listed company conducting EJIP support our assumption of the gratifiedincentive compensation on EJIP. The statistics results show that investorsmake a positive reaction to EJIP adoption news, which will increase firms’market values. It implies that EJIP can help the company to reduce agencyconflicts for maximizing shareholders’ wealth. However, it is not conclusivethat EJIP has a statistically significant effect on the corporate accountingperformance. One reason is that the EJIP adoption period is not long enough. |
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