Research On The Protection Of The Interests Of Small And Medium Shareholders By Commitment Of Performance Compensation

In the capital market,listed companies tend to use mergers and acquisitions to expand the industrial chain and promote a new round of development of the company,but because of the existence of various risks,mergers and acquisitions are often not necessarily successful,and performance commitments as an effective tool for adjusting and assessing the premium during mergers and acquisitions are used by most enterprises to reduce the risk of mergers and acquisitions.Reasonable performance commitments can also create synergies and positive incentives to drive the realization and success of M&A.However,an unreasonable performance commitment system will form a valuation bubble or raise the premium,bring high returns to major shareholders,and deviate from the original intention of protecting the rights and interests of small and medium-sized shareholders.When the agreed performance cannot be achieved,the major shareholder will make an interest transmission for their own interests in order to seek maximum profits or avoid compensation,resulting in damage to the rights and interests of minority shareholders.In the case selected in this article,In 2015,Jinma Co.,Ltd.was one of the largest manufacturers of vehicle instruments in China,and in order to increase its business and develop the new energy automobile industry,it chose to acquire Yongkang Zhongtai to expand the downstream industrial chain of auto parts,and signed a high-evaluation and high-guarantee performance commitment agreement during the merger,with a commitment period of more than 10 billion yuan and a compensation payment of more than 10 billion yuan,which brought huge losses to small and medium-sized shareholders.The full text is analyzed according to the characteristics of the new energy automobile industry and the company itself,first summarizing the relevant literature,and then through case analysis,from the disclosure of the merger and acquisition announcement of Jinma shares to the adjustment of the transaction plan to introduce the overall acquisition process,from the specific content of the performance compensation commitment to the realization and its compensation status,the general situation of the performance commitment agreement of Zotye Automobile Application.Subsequently,the method of conveying benefits by major shareholders throughout the performance commitment agreement is analyzed,such as related party transactions,surplus management,share pledge,etc.Finally,the short-term market reaction at the time of signing the performance commitment,when it is not completed,and the short-term market reaction at the end of the commitment period is analyzed by the event research method.Through in-depth research and analysis of cases,this paper shows that the performance compensation commitment cannot absolutely achieve the effect of safeguarding the interests of small and medium-sized enterprises,but can be used as a tool for major shareholders to transmit "false signals" to the outside world,which in turn makes major shareholders more covertly hollow out the enterprise and further harms the interests of small and medium-sized investors.Through the analysis of the case of Zotye Automobile,this paper puts forward relevant suggestions from the perspective of the actual application of the performance compensation commitment to encourage the major shareholders to hollow out,from the perspective of reasonably setting up performance commitment agreements,strengthening external supervision of major shareholders and penalties after violations,and improving the ability of small and medium-sized shareholders to distinguish themselves,hoping to provide reference for other enterprises.