| In recent years,The role of M&A transactions in the capital market is particularly important.Many companies have begun to adopt the performance commitment,a tool to adjust the valuation premium to reduce the risk of mergers and acquisitions.With the increase in the application of performance commitments in mergers and acquisitions,the problems have gradually become prominent.In some cases,performance commitments have become a tool to boost high valuations under the income law,a hype for raising stock prices,and its performance commitment system.It is contrary to the original intention of reducing the valuation bubble under the income method and protecting the interests of small and medium shareholders.Due to the inability to achieve the high performance promises,major shareholders often reduce the performance commitment cost through various means,reduce their own compensation pressure,and damage the interests of small and medium shareholders.The original guarantee mechanism has become an arbitrage tool for major shareholders.In order to explore the impact of performance commitments on the interests of small and medium shareholders in mergers and acquisitions,this paper mainly uses the research methods of literature research and case analysis,analyzes the performance commitments of mergers and acquisitions cases,and finds out the problems in the implementation of performance commitments.Make recommendations in a targeted manner.Through the analysis of the achievement of performance commitments,explore the application of performance commitments in the process of mergers and acquisitions,can really play a role in protecting the interests of small and medium shareholders.This paper firstly summarizes the related literatures on performance commitment and the protection of minority shareholders’ interests,briefly introduces the related concepts and theoretical foundations involved in this paper,and analyzes the mechanism of performance commitment to protect the interests of minority shareholders on the basis of literature research.Then,using the case analysis method,taking Steyr as an example,expounding the background and application status of the performance commitment system,the case of the Steyr merger and acquisition case,based on the case study background,analyzing the high performance promise from the motivation of performance commitment Afterwards,in order to reduce the commitment cost,the promised party’s earnings management,change compensation method and default payment will damage the interests of small and medium shareholders.After the company’s performance commitment,the business situation will be worse,and the performance compensation market reaction will be negative.Performance commitments did not exert their protective effects.Then,in-depth analysis of the reasons for poor performance commitments.Finally,in view of the problems in the case analysis,from the three aspects of reasonable performance commitment,perfect internal corporate governance and strengthening external supervision,the paper puts forward suggestions for regulating the performance of listed companies and protecting the interests of small and medium shareholders.Through the foregoing analysis,it is found that performance commitments may not be able to play the role of protecting the interests of small and medium shareholders,and may even become a tool for transmitting “false”signals.After the high commitment,under the pressure of high compensation,the promiser will evade the compensation obligation through the earnings management,change the compensation method to reduce the compensation loss,and the failure of the internal governance of the company provides an opportunity for the existing system.The imperfections make the promiser’s violation cost far less than the illegal income,making the promiser easy to appear “Untrustworthy person” behavior,resulting in further damage to the interests of small and medium shareholders.In the process of mergers and acquisitions,if the protection effectiveness of performance commitments is effectively exerted,listed companies should reasonably set performance commitments and improve internal corporate governance.The regulatory authorities should strengthen follow-up management on the basis of improving relevant systems.The innovation of this paper is to study the performance commitment from the perspective of the protection of the interests of small and medium shareholders,and it has certain innovation in the research content.There are few studies on performance commitment and the protection of minority shareholders’ interests.This paper supplements this research. |
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