Case Analysis Of Shandong Mine Performance Compensation Agreement

With the explosion of the merger and acquisition market in recent years,more and more enterprises have begun to expand their financing channels through mergers and acquisitions.After 2008,many enterprises began to adopt the performance compensation agreement in the M & A activities.Some enterprises successfully used the performance compensation agreement to protect the interests of small investors.However,due to the late development of China's performance compensation agreement,the application is not mature enough,and there are also some failed cases.Some of these cases are due to excessive performance commitments,which lead to difficult completion of expected performance,others because of refusal to perform agreements,resulting in equity disputes.The reasons for the failure are complex and varied,but they eventually bring huge losses to the listed companies and the small and medium shareholders.The case of this article is the case of the listing of Tafu industry in Shandong in 2012.In order to be able to list and raise funds,Shandong mining and mining industry has invested two iron ore resources as the underlying assets,and has gained 23.92% stake in Taipu industry.It has become a controlling shareholder and has signed a performance compensation agreement for 3 years.But in the 3 year of the performance commitment period,the domestic iron ore resources fell sharply,the results did not meet the commitment standard,some shareholders sold in terms of compensation before the stock trigger early departure,in the case of small and medium-sized investors against forced change performance compensation mode leads to performance compensation failed,resulting in enterprises in the long-term performance dilemma the interests of small investors suffer heavy losses.It is found that the design of the performance compensation agreement signed in this case has many unreasonable points.For example,the performance compensation period is not matched with the limit sale period,the compensation method is single,the performance compensation protocol change procedure is not clear and so on.Therefore,on this basis,this paper puts forward some suggestions for improvement.On the one hand,when making a performance compensation agreement,enterprises should make comprehensive use of compensation payment,the time limit for issuing shares,and match the performance compensation period,and restrict the issuers to change the actual controller.On the other hand,the government can further improve the performance compensation agreement system from the provision of the necessary provisions for the establishment of performance compensation agreements.In order to provide some suggestions for future enterprises that sign the performance compensation agreement,it also provides some suggestions for the relevant oversight bodies to improve the performance compensation system.