Performance Compensation Methods Of M&A And Protection Of Minority Shareholders' Interests

In recent years,China's economy is shifting from high-speed development to high-quality development,more and more listed companies choose to integrate resources and expand the market through mergers and acquisitions.However,with the increasing number of M&A transactions,it is becoming more and more common that the poor quality of underlying assets affects the performance of listed companies and thus damages the interests of minority shareholders.In order to restrain listed companies and protect the legitimate rights of minority shareholders,China's Securities Regulatory Commission firstly put forward performance compensation commitment in "Measures for the Management of Major Asset Restructuring of Listed Companies" in 2008.Since then,the performance compensation commitment has begun to appear in the market of China's listed companies' M&A transactions.With the continuous development of the performance compensation mechanism,there are more and more debates about whether it can really protect the interests of minority shareholders,and the role of three existing compensation methods in protecting the interests of minority shareholders still needs to be studied.This paper selects three listed companies in the communication equipment industry as study case,and compares the impact of the three performance compensation methods on the interests of minority shareholders in the current China's market.Firstly,this paper sorts out the process of M&A transactions,performance compensation commitments and performance of the three case companies.Secondly,this paper analyzes the impact of different performance compensation methods on the interests of the company's minority shareholders from the perspective of long-term impact and short-term impact,and explores whether the performance of listed companies has improved after the implementation of the three compensation methods,whether the stock price of the companies has shown a rising trend,and whether the minority shareholders can benefit from it.Thirdly,this paper analyzes the changes in financial indicators of three listed companies after adopting different compensation methods through hypothetical simulation analysis.The conclusions are as follows:(1)There are still some problems in the application of performance compensation in China,the relevant mechanisms need to be improved.(2)All three kinds of performance compensation methods can have a positive impact on corporate performance to a certain extent,but the positive effect does not last long.(3)All three compensation methods can play a positive role in the increase of the excess return rate of the company's stock,but the market reaction of share compensation is better than cash compensation and mixed compensation.(4)According to the results of the hypothetical simulation analysis,in terms of the role of protecting the interests of minority shareholders,the effect of share compensation method is better than the mixed compensation method,and the mixed compensation method is superior to the cash compensation method.All in all,the performance compensation mechanism of M&A transaction can play a positive role in protecting the interests of minority shareholders to a certain extent.This paper aims to enrich the research on the relationship bewteen performance compensation mechanism and the protection of minority shareholders' interests,enrich existing theoretical analysis,and and put forward suggestions for the improvement of performance compensation mechanism in China.