A Case Study Of Performance Commitment Compensation In Mergers And Acquisitions

Performance Commitment Compensation predicts and promises the operating status of the follow-up company through the profit situation.If the promised profit amount is not reached in the future operation,it needs to be compensated.On the one hand,it can balance the price evaluation of M&A agreement,on the other hand,it can restrain the management of the company to ensure that the company improves its performance,but it may also create problems.The investment decision-making problems of small and medium-sized shareholders due to information asymmetry and other factors.In this thesis,we study the difference of compensation effect of cash compensation,stock repurchase and share donation in performance commitment from four aspects: financial effect,market reaction,source of compensation fund and effect of bottom-pocket clause.In this paper,case study method is used to select the M&A cases of Qixing Chen,Shensangda and Zhongbing Hongjian as examples.Cash compensation,stock repurchase compensation and stock gift compensation are used to study the different effects of different compensation methods adopted by the three companies to sign performance commitments.In the case analysis part,firstly,it briefly analyses the financial data since Qixing Chen,Shensangda and Zhongbing Hongjian signed the performance commitment compensation event and the company value changes of the same industry company;secondly,it compares the changes of stock price and cumulative excess return rate in different periods after signing performance commitment;thirdly,it compensates the capital when the acquired party fulfills the performance commitment compensation.The source of the problem is analyzed.Finally,the quality of impairment test and evaluation of compensation assets is analyzed.This thesis summarizes the Enlightenment of the way selection,system construction and environmental protection of performance commitment compensation: stock donation compensation is the best choice of current performance commitment compensation.It gives enlightenment to the environmental protection of performance commitment compensation from four perspectives of supervisors,evaluation agencies,listed companies and small and medium-sized shareholders,and provides some references for the protection of relevant listed companies and investors in the future.