Research On The Influential Factors Of The Choice Of How Large Shareholder To Cope With The Crisis Of Accomplishing The Performance Compensation Commitment

In recent years,the number and amount of mergers and acquisitions in China are rapidly growing,while the commitment to performance comes to a high level.As an innovative form of contract,performance compensation is used more and more in M&A transactions.Therefore,performance compensation commitment arouses more and more concerns of theory and practice community,and what measures to take while listed companies face the performance compensation commitment crisis further becomes a hot topic of discussion and research.Previous researches on performance compensation commitment mainly focus on the following three aspects:accounting treatment,the differences and influences of cash compensation and stock compensation,and the synergy effect of M&A.Based on its own rights and attributes,the major shareholder as promised party of performance compensation plays an important role,no matter in the process of negotiations on the subsequent commitment performance of the underlying assets,or in the management of the underlying assets during the commitment period,even in the compensation process after performance compensation commitments are triggered.This paper makes a deep analysis and interpretation of the factors of the way to deal with the crisis of performance compensation commitment through the cases of six listed companies named ACIG,Hareon Solar,DHHI,Stery Motors,Feida Envro,Youngy.This paper draws the following three conclusions:First,the choice of earnings management through the performance of compensation commitments,earnings management time will affect the choice of earnings management.For the majority of shareholders,accruals earnings management can be used to circumvent the performance compensation is triggered,and the dividend policy is more applicable to the performance compensation is triggered to reduce the performance compensation liability.Second,the choice of the parties through direct compensation performance compensation commitments,the shareholding ratio of listed companies will affect the choice of compensation.The more unstable the controlling shareholder’s controlling shareholder,the less inclined to choose the way of compensation.Third,the decision of the majority shareholder for future profitability will affect the choice of deferred compensation.If the major shareholder of the underlying asset future profitability is optimistic,tend to only extend the commitment period end of year;if the shareholder of underlying assets are pessimistic about the future profitability,they are likely to defer the overall delay of the commitment period.