This study intends to investigate the impact of different types of employee bonuses on productivity for Taiwan's electronic firms which contribute significantly in Taiwan's economic development and pioneer in innovative employee compensation scheme for two decades. The high-tech companies grant employee equity-based compensation to attract and retain talented employees. Literatures show that those incentive policies would improve firm performance. We employ two-stage Data Envelopment Analysis to evaluate the impact of compensation policy on productivity of electronic firms in Taiwan from 1999 to 2003. We find significantly a positive impact of cash bonus and a negative impact of stock bonus and employee stock options on firm productivity. The results suggest that stock bonus adopted by most electronic firms in Taiwan does not promote better firm productivity. Thus, the positive relation between equity bonus and firm performance in prior studies could be explained by the upward estimated earning due to not expensing the employee bonuses. In addition, managerial shareholding, institutional shareholding and the ownership of large shareholders have positive impact on productivity, and the board size indicates a negative relation to productivity.