The Compensation Commitment Of Major Shareholders And The Interests Protection Of Minority

In 2014,CSRC issued the regulation of major assets restructuring for listed companies,which aims to reduce the problems of asymmetric information of both parties in the process of assets reorganization and maintain trade fair,thus protecting the interests of the listed company and small and medium-sized investors.According to statistics,between 2013 and 2015,there were a total of 570 major asset reorganizations approved by the CSRC,of which 248 signed the performance compensation agreement,accounting for 43.5% of the total.In recent years,with performance promises have expired,the disadvantages of performance compensation commitment become more and more obvious.performance compensation commitment in the process of execution can really protect the interests of minority investors and promote the operation and development of listed companies,it's a problem need to be researched.When Hareon Solar Backdoor Listing Jiangsu Shenglong Hi-tech Group.Co.Ltd,the major shareholders of Hareon Solar promised performance compensation commitment for three years.However,its performance compensation commitment did not achieved the goals.And during the promise of performance,the company has distributed high cash dividend and modified the performance compensation scheme,etc,thus the implementation effect of performance commitment needs to be investigated.So in this paper,we choose Hareon Solar Backdoor Listing Jiangsu Shenglong as an example to study the performance compensation commitment in the process of execution can really protect the interests of minority investors and promote the operation and development of listed companies.and expect to provide practical advice for our performance compensation commitmentsystem,and provide reference for small and medium-sized investors' investment decisions.This article analysed and summarized reviews of the performance compensation commitment and the protecting of the interests of minority investors.This paper used the Asymmetric Information theory,the Principle-agent theory and the Major shareholder tunneling theory in case analysis.The case analysis of this paper mainly studies the following three questions:(1)why major shareholders make performance compensation commitment?(2)what bad behavior happened to the major shareholders after the failure of the performance promise in order to meet the profit compensation terms?(3)whether the performance compensation commitment made by the major shareholders has played a role in protecting the interests of listed companies and minority shareholders?This paper found that:the performance compensation commitment promised by big shareholders of Hareon Solar do not conform to the enterprise's internal and external environment,the main purpose is to use performance promises good signals to the SFC and the investors,so that the Supervision organization can approve restructuring plan as soon as possible,and achieve successful backdoor listings;Secondly,when the listed company performance pledge not to amount to mark,triggering profit compensation obligation,big shareholders may be through high cash dividend to modify behavior such as performance compensation scheme to compensate for their losses,and thus affect the operation of listed companies,for small and medium-sized shareholders interests caused by the infringement;Finally,from the point of this case,the performance compensation commitment promised by big shareholders of Hareon Solar at the time of backdoor listings,did not effectively promotes the development of the management of listed companies,from the point of market response,small and medium-sized investors to assess the performance of big shareholders to make commitment and performance of listed companies during the commitment of negative cash dividend distribution,the compensation commitment didn't really protect performance of listed companies and the role of small and medium-sized investors.