Research On The Motivation And Impact Of The Termination Of Performance Compensation Under The M&A Resale Model

With the rapid development of the international economy,China's capital market has gradually grown.In this context,more and more companies choose to rely on mergers and acquisitions to optimize allocation,pool resources,and expand market share.This approach has gradually become a shortcut,which has helped the accumulation of corporate capital and the rapid improvement of competitiveness.M&A is the product of economic and capital development in the new era.It brings many benefits and hidden risks.This is often the result of incomplete information from both parties.Financial scientists have tried many tools and methods to reduce the impact of the drawbacks.The most widely used and most feasible operation is the performance compensation agreement.Therefore,in the process of mergers and acquisitions,the M&A company and the target company often sign a performance compensation agreement.If the target company fails to meet the performance,it will trigger the performance compensation agreement according to the corresponding standard.The CSRC stressed that it is not possible to arbitrarily change the performance compensation agreement.Once the actual performance is not up to standard,it must compensate the purchaser according to the performance compensation standard.This paper selects JiAi Technology as a case company,which has certain practical significance and representativeness.First of all,JiAi Technology chose to resell the target company after the merger,which led to the termination of its performance compensation agreement.The real motivation and impact behind this series of actions are worth studying.Secondly,the case of the company that sells the target after the merger is rare in China.This kind of behavior is likely to become the choice after the performance promise of the listed company in China is not up to standard.In the case of the acquisition of AnPu Victory by JiAi Technology,this paper firstly describes the basic information of the merger and acquisition companies and the whole process of mergers and acquisitions,and analyzes the motivation of the merger and acquisition,the root cause of the termination of the performance compensation agreement and the possible merger and sale of the event.The impact is analyzed in depth.The motivation for the termination of performance compensation of JiAi Technology under the M&A and resale model is summarized into two parts,namely internal motivation and external motivation.External drivers have macroeconomic changes and related policy changes.The internal drivers are mainly: the decline in profit levels,the value of large-value goodwill,earnings management,and the interests of major shareholders.At the same time,although JiAi Technology's behavior has a certain role in promoting its financial indicators such as profitability in the short term,it has a negative reaction to the market,causing its company's share price to continue to fall.Finally,the paper summarizes the problems in this case and puts forward corresponding suggestions for the future development of the M&A market.I hope that it can provide reference and thinking for enterprises that avoid the risks of M&A by signing the performance commitment agreement,and then continuously improve and develop China's capital market.