Research On Performance Compensation Commitment From The Perspective Of Earnings Management In Company Y

Performance compensation commitments,as a contractual arrangement in a major asset reorganization of a listed company,have played an important role in protecting the rights of the acquirer.However,with the increasingly active M & A activities of listed companies in China,the issue of performance compensation commitments of the target companies has become increasingly prominent.For example: the outstanding rate of performance compensation commitments has increased year by year,the uncompleted rate has increased over time,and the phenomenon of "accurate completion" has become increasingly serious.According to statistics on the completion of performance compensation commitments in the A-share market in 2015,it was found that 625 companies have completed their promised performance and 155 have not yet completed,while 400 of the target companies that have completed their promised performance have achieved 100% performance completion-110%,accounting for more than 64%.And under this precise "transcript",there are not a few companies whose performance declines rapidly after the commitment period,especially those listed on the backdoor.This has to make people doubt the authenticity of their performance.There may be signs of earnings management behind the target company's accurate completion of performance compensation commitments.Therefore,the true role of performance compensation commitments needs to be re-examined.This article takes the company Y,which has completed its performance compensation commitments accurately for three consecutive years,as a case study object,and studies the relationship between its backdoor listing performance compensation commitments and earnings management,as well as the implementation path of earnings management,so as to provide investors with some new thinking and judgment method.Therefore,this paper is based on theoretical research and case analysis.Firstly,this article summarizes the existing research results on performance compensation commitment and earnings management,and finds the research direction of this article.Secondly,it expounds the related theories of performance compensation commitment and earnings management,clarifies the core concepts,and explains the relationship between the two under the asymmetric information and incomplete contract theory.Then this article takes Company Y as an example to analyzethe setting and implementation results of performance compensation commitments.In view of the abnormal performance of the case company after its performance commitment period expires,the empirical identification method and model measurement method are used to identify and verify the earnings management behavior of the case company.It also discusses the earnings management methods of the case company during the commitment period.And it analyzes the impact of the combined use of performance compensation commitments and earnings management on the cost-benefit of the promised party based on the degree of income of the promised party.Through the analysis of the case,the following conclusions were reached: the case company used earnings management to achieve performance goals during the performance commitment period,and the case company's earnings management during the performance commitment period was significantly stronger than before and after the performance commitment period,indicating that the performance compensation commitment induced its earnings management behavior.Finally,based on the conclusions obtained in this article,from the different stages of signing performance compensation commitments,performance information disclosure,and supervision,give suggestions on the application of performance compensation commitment system,so as to fundamentally reduce the opportunities for earnings management and truly exert the protection of performance compensation commitment.