2007-03-27 04:11:10 · 4 answers · asked by Deepak 1 in Business & Finance ➔ Corporations
This is in regards to the equity the company increases by giving 1:1 bonus etc. How does that help the company?
2007-03-27 16:24:10 · update #1
It's nothing more that a "feel good" tactic to side-step the lack of raises.
My employer has done it for years.
2007-03-27 04:19:40 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Because it's much cheaper than giving out cash. The only cost is the administrative amount to issue the shares.
2007-03-27 12:23:40 · answer #2 · answered by No Name 2 · 0⤊ 0⤋
If your referring to employees, it is for incentive purposes. For example, for achieving some goal within the company, sales, business development, etc. If you are referring to shareholders, like a stock dividend, then it is rewarding the shareholders for the stock performing well.
2007-03-27 11:22:13 · answer #3 · answered by BangkokBob 4 · 0⤊ 0⤋
(1) to retain profits in business,
(2) to keep its a good cash liquidity position,
(3) to take tax benefits (applicable to some countries),
(4) to benefit existing shareholders instead of seeking new additional capital,
(5) to dilute market value per share to some extent (sometimes!).
2007-03-30 13:59:42 · answer #4 · answered by Torontorian 2 · 0⤊ 0⤋