Research Of The Motivation And Economic Consequences On Performance Commitment

Performance commitment refers to the commitment made by the asset assigning party to the asset buyer in the future period of the underlying asset in the process of merger and reorganization and the listing of the borrowed shell.If the actual operating performance of the transferor has not reached the performance standard,the part of the actual profit less than the profit forecast should be purchased.The compensation is made by the party.Performance commitment has played a certain role in restraining the high valuation of underlying assets and protecting the interests of small and medium shareholders,so it has been widely applied in mergers and acquisitions.However,it is not effective in preventing and controlling long-term risks in mergers and acquisitions,and aggressive performance commitments will also increase the motivation of violations.With the increasing number of mergers and acquisitions,the risk of performance commitment has also aroused people's rethinking.This paper first introduces the related concepts,theoretical basis and institutional background of performance commitment,and summarizes the literature related to the motivation and economic consequences of performance commitment.Then,combining theory with practice,using case analysis method,taking Jiangsu Steyr as the research object,we analyzed the motivation and economic consequences of performance commitment.First,it introduces the process of case M&A and the realization of performance commitment;second,from the angle of obtaining the control right of the listed company and strengthening the investor's confidence,the motivation of making performance commitment is analyzed.Third,from the perspective of management performance,corporate governance,earnings quality and income quality.Steyr controlling shareholders to make a commitment to performance the economic consequences are discussed.This paper links the motivation of performance commitment and economic consequences to help investors understand the performance commitment more.It provides some inspiration for other enterprises to use performance commitment reasonably,and also provides a new entry point for the supervision department to improve the performance commitment system.