Research On The Influence Of Performance Compensation Commitment On The Acquirer’s Enterprise Value

As an important means of domestic industrial restructuring and effective integration of resources,mergers and acquisitions and restructuring transactions have been increasing year by year.However,due to the complexity and high risk of transaction activities,it is difficult for companies to successfully complete transactions.Performance compensation commitments,as a contractual mechanism arrangement to promote mergers and acquisitions and restructuring transactions,can facilitate the completion of mergers and acquisitions by all parties to the transaction by signing performance compensation commitment agreements.Theoretically,performance compensation promises can reduce the negative impact of the parties in the transaction due to the mismatch of information,and also play a role in enhancing the integration of various resources and businesses of the enterprise,thereby increasing the value of the enterprise.However,with the large-scale application of performance compensation commitments in practice,many shortcomings have been exposed.The phenomenon of high commitments and low realizations occurs from time to time.People also question whether performance compensation commitments can increase the value of the acquirer’s enterprise.This article first sorts out the existing domestic and foreign research results on the impact of performance compensation commitments and mergers and acquisitions on corporate value;secondly,based on signaling and incentive theory,analyzes the mechanism of performance compensation commitments affecting corporate value;The performance compensation commitment signed by Ling Information when it acquired Beijing Shida Ke was used as the case analysis object,and the economic value added method and event research method were used to analyze the impact of performance compensation promises on the long-term and short-term corporate value of the acquiring company Chu Ling Information.Through case analysis,this article draws the following conclusions: The performance compensation commitment agreement can increase the value of the company in the current period,but it has no effect on the long-term overall value of the company.Finally,based on the conclusions drawn from the case analysis,relevant suggestions are made: In M&A and restructuring activities,companies should pay more attention to the M&A transaction itself from the selection of the target party,and there is no need to sign a performance compensation commitment agreement when it is not necessary;if the parties to the transaction choose to sign the agreement,Enterprises should pay attention to the specific settings of the terms of the agreement.It is hoped that the research in this article will provide more reference materials for the domestic academic community to correctly and objectively evaluate performance compensation commitments,and provide specific reference opinions for whether companies choose to sign performance compensation commitment agreements during mergers and acquisitions or how to agree on specific agreements when they must sign agreements.