| With the increase of M&A activities,the risks of M&A and restructuring are gradually emerging.Both sides of M&A will bring about the consequences of false valuation of the underlying assets due to the information asymmetry.At the same time,the interests of small and medium shareholders will also be seriously damaged due to the information difference between the shareholders and the major shareholders.In order to solve these problems and protect the interests of listed companies and small and mediumsized investors,a system of performance compensation commitment has been put forward which is still in use.Performance compensation commitments are more and more favored by listed companies in the capital market,but the problem of non-compliance caused by them has become more prominent.From 2014 to 2018,publicly announced performance commitments failed to meet the standards show a year-on-year trend,especially in the digital marketing industry,performance failures have become more prominent.In recognition of the fact that the performance compensation commitment system is inconsistent in the actual operation of the enterprises,in the meantime,take it into consideration that there is less research about performance compensation commitments on the protection of the interests of small and medium shareholders at present and the current digital marketing industry performance commitments have not been fulfilled,this study takes the cross-border M&A of Leo Group Co.,Ltd.as an example to explore the relationship between performance compensation commitments and the interests of small and medium shareholders.This paper uses the methods of case research and event research,based on the theory of information asymmetry,signal transmission,and major shareholder hollowing out,to analyze the relationship between performance compensation commitment and the protection of small and medium shareholders' interests from four dimensions: asset evaluation,company performance,market effects,and compensation risk.First of all,combining the specific situation of target company asset evaluation,the cause of the event that the performance compensation commitment affects the interests of small and medium shareholders is described,which is due to the unreasonable valuation;secondly,it is researched from the two aspects of the company's internal performance and the external market share price changes that the impact of performance commitments on small and medium shareholders when performance commitments fail to meet the standards.The case analysis shows that the company's performance was poor,including goodwill impairment,earnings management,and major shareholder hollowing out,in addition,combined with the trend of stock prices and excess returns in the event window,the results suggested that performance compensation commitment fails to effectively protect the interests of small and medium-sized shareholders when the performance is not up to standard.Finally,it further expounds that performance commitment will aggravate the extent of damage to the interests of small and medium-sized shareholders when the performance is not up to standard and compensation is not fulfilled.On this basis,from the aspect of making performance commitment,it is suggested that the company should treat performance commitment rationally and use performance commitment reasonably;from the aspect of improving the protection system of small and medium-sized shareholders,it is suggested to set up valuation constraint mechanism,strengthen supervision and punishment,and remind small and medium-sized shareholders to be more vigilant when they invest,which will not only provide a certain theoretical basis for the development of performance commitments and the protection of the interests of small and medium shareholders,but also promote the effective use of performance compensation commitments in China's capital market and the real protection of the interests of small and medium shareholders. |
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