The Effect Of Performance Compensation Methods On Corporate M?A Performance

In recent years,most of the listed companies expand their business and integrate industry resources through mergers and acquisitions.At the same time,more and more mergers and acquisitions will make performance commitments in mergers and acquisitions.Once the promises are reached,there will inevitably be failures,and the phenomenon that performance commitments fail to meet the standards is increasing year by year.These failures have a negative impact on the healthy development of China's securities market.Nowadays,when M&A is conducted,the asset value of the target will be evaluated.The income method is the method chosen by more than half of the listed companies in China.However,the final valuation under the income method is not stable,which is largely influenced by performance commitment.This is because some listed companies want to complete M&A smoothly,and the value of the target assets of M&A is too high.Exaggerate,and then make too high or too low performance commitment goals.However,after the end of the performance commitment period,the undertakers who fail to meet the performance commitment criteria will find various reasons to change the previously agreed performance compensation methods or modify the commitment terms,so as to eliminate the negative impact of performance compensation failure on themselves as far as possible.At present,the system of performance commitment in China is not perfect.The urgent problem to be solved in M&A is what kind of performance compensation method to choose and how to make the acquired party fulfill the performance compensation agreement as promised.Nowadays,when signing performance commitment agreements,our country mainly adopts two ways of performance compensation,one is stock compensation,the other is cash compensation.These two kinds of performance compensation methods will bring different restrictions and supervision to both sides of M&A,and bring different potential risks to M&A transactions.These potential risk factors play a role in performance commitment period,and ultimately affect the performance of M&A.This paper studies and analyses the ways of share compensation and cash compensation separately,and compares the two forms of performance compensation with the case of Huawen Media's M&A of Yitong and Bongfu Software.It explores the different effects of these two forms of performance compensation on the performance of M&A.It also explores which form of performance compensation should be chosen and how to ensure performance commitment.Suggestions are put forward for the smooth implementation of the Nobel Agreement.