Performance Compensation Commitment In M&A Restructuring And Protection Of Small And Medium-sized Shareholders' Interests

In recent years,the M&A market in China has been very active,and the number of M&A has increased year by year.There are many innovations related to major asset restructuring,and performance commitment is one of them.Especially since 2013,the mobile Internet industry has been on the rise,the traditional information industry is facing transformation,and mergers and acquisitions are particularly frequent.With the rapid development of mergers and acquisitions,the case of restructuring failures is not uncommon.Large shareholders have decision-making power,and the merits of their decisions directly affect the interests of all shareholders.If large shareholders have short-selling assets,transfer profits or inject them for their own interests.For non-performing assets and other behaviors,small and medium-sized shareholders who are in a weak position due to lack of information are the first victims.In order to reduce the risk of restructuring and fully protect the interests of small and medium shareholders,the relevant departments recommend that enterprises make performance commitments when major asset restructuring is carried out.In theory,performance commitments can indeed improve the efficiency of mergers and acquisitions,enhance transaction transparency,reduce the uncertainty of future companies' profitability,and reduce the risk of integration failure.So many advantages make performance commitments widely used in mergers and acquisitions.However,more and more companies apologize for failing to complete their performance,seriously damaging the interests of small and medium shareholders.Therefore,it is a very necessary task to study the effect of performance compensation commitment in mergers and acquisitions on the interests of small and medium shareholders.This paper selects Jiuqi Software's high-value merger and acquisition of Yiqilian incident as a research case,using literature research method,case study method and comparative analysis method.Through the analysis of the listed company's operating performance,the market reaction caused by the unfulfilled promise,and the impact of the impairment of goodwill and the arbitrage of major shareholders on the interests of small and medium shareholders,the relationship between performance compensation commitment and the protection of minority shareholders' interests is explored..In terms of the company's operating performance,the performance compensation commitment can stimulate and constrain the management of the counterparty in the short term,so that it can work hard to fulfill the promised performance,improve the operating status and profitability of the listed company,and bring benefits to the small and medium shareholders.However,for 3 years,Achieving performance commitments,indicating that the underlying assets are not of high quality,and the large shareholder's largescale reduction behavior also illustrates this point.Therefore,the performance compensation commitment can not effectively improve the operating status of listed companies,nor can it guarantee the long-term interests of small and medium-sized shareholders;According to the market reaction,when the performance commitment is signed,the market can have a positive announcement effect.The high-value acquisition can bring confidence to the investors and bring excess returns to the small and medium-sized shareholders.However,the target company has not achieved the results in succession,resulting in the stock price.The decline directly harms the interests of small and medium-sized shareholders.From the internal perspective of the company,performance commitments provide conditions for high premiums.Major shareholders have reduced their cash-holding behavior during the commitment period.There is a suspicion of invoking inferior assets by signing performance compensation commitments.The impairment of goodwill has made the listed company's operating conditions worse,directly Damage to the interests of minority shareholders.Therefore,the protection effect of performance commitment on the interests of small and medium shareholders is actually very limited.