Methods Of Performance Compensation Commitment And Investors’ Protection In Merger And Acquisition-Based On Cases Analysis

With the development of China’s economy,China’s listed companies are increasingly active in the M&A and reorganization market,and more and more listed companies are realizing leapfrog development through M&A and reorganization.Through mergers and acquisitions,enterprises can absorb capital and technology,effectively enhance their capabilities and promote enterprise expansion [1].However,in the process of mergers and acquisitions,changes will occur in the equity structure,control rights and asset quality of listed companies,which are likely to harm the interests of minority shareholders.Therefore,China regulated the performance compensation mechanism for the first time in the "measures on the management of major assets reorganization of listed companies" issued in 2008.The core of this mechanism is to protect the interests of minority shareholders.The regulations stipulate that for listed companies whose assets are evaluated on the basis of the income law and on the basis of which the valuation is based,relevant reports shall be issued within 3 years after the completion of major assets.Report to reveal the actual profit and the assessment of the assets of the different report the number of profit forecasts,the dealing party shall,with the listed company is the actual number is insufficient to predict the number of specific and feasible compensation agreement.However,in practice,it is still controversial whether performance compensation commitment can protect the interests of minority shareholders,and different performance compensation methods will have different effects on the interests of minority shareholders.At present,the performance compensation commitment mainly includes cash compensation,stock compensation,cash plus stock hybrid compensation and other three ways.In this thesis,Success Electronics co.,LTD.,IRTOYUCH co.,LTD.,and Shenzhen Microgate Technology co.,LTD.,three companies of electronic component equipment manufacturing,are selected as research objects.The three enterprises adopt the above three compensation methods respectively.This thesis through the case analysis results compensation commitment to the interests of minority shareholders,and by comparing the three cases of market reaction,analysis the performance of different compensation effect on the interests of minority shareholders.First of all,this paper will sort out the merger and reorganization process,performance compensation scheme and performance compensation of the three companies.Secondly,this thesis uses financial analysis method and incident research method to study the protective effect of performance compensation for minority shareholders.Through the comparison of three cases study found:(1)from the perspective of enterprise operating performance,a hybrid compensation cases of compensation of shares and the company’s financial performance is better than using cash compensation mode of case company,but three cases are compared annual reduce the company’s financial performance,and outstanding commitment to performance.(2)from the view of the market reaction of stock price,a hybrid compensation mode of case company accumulated excess return of shareholders is,cash compensation for the two cases of compensation of shares and the shareholders of a company accumulated excess return is negative,according to the results of the hypothesis comparative analysis using stock compensation case company financial index is better than that of using cash compensation case;(3)the performance compensation effect of major shareholders is closely related to the company’s operating condition,and the performance compensation commitment effect of the company with good operating performance is good.The research results show that the performance compensation commitment system can only protect the interests of minority shareholders.The results of the study are of constructive significance to regulatory governance,asset appraisal,listed company governance and market investment.