The Research For Relationship Between Performance Compensation Commitment And Underlying Asset Pricing

Last years,mergers and acquisitions in China have become more and more active.Not only is the price of underlying asset the focus between many stakeholders,but it's also the hot research topic.In M&A,both transaction sides often make an agreement on performance commitment and compensation.And now,this arrangement is generally adopted by the market participants to protect the minority shareholders' interest.In this paper,we'll focus on the relationship between underlying asset pricing and performance commitment.We take the listed company M&As approved by CSRC from 2008 to 2014 as the sample,in order to empirically study the relationship between growth commitment,compensation manner and underlying asset pricing.In the empirical part,the samples are classified into ‘income method' group and ‘non-income method' group;then through grouping regression,it is explored whether explaining variables have obvious significance over the pricing.At last,the indicator variable is introduced in divergence analysis to test whether the partial regression coefficients of explaining variables in two groups have significant difference.We have drawn conclusions as follow: Under income method,committed growth has significantly positive relations with pricing;while under non-income method,they have no significant relations.The price of underlying asset which adopts equity compensation is higher than that adopting cash compensation regardless of valuation methods used.