Research On The Performance Compensation Commitment Clause Of The Gambling Agreement

The number and scale of mergers and acquisitions in China’s capital market are increasing year by year.In order to adjust and solve the problem of information asymmetry in mergers and acquisitions,many enterprises have introduced betting agreements.However,due to the issue of performance compensation commitment clauses in the gambling agreement,the occurrence rate of performance substandard and performance loss is too high,and there are frequent defaults,which also damage the rights and interests of the acquirer,the acquired party and small and medium-sized investors.This paper will combine case analysis to study the performance compensation commitment terms of bet agreements.Firstly,this paper expounds the concept and connotation of betting agreement and performance compensation commitment,and analyzes the nature of betting agreement and the value of performance compensation commitment.Secondly,taking xinhua medical merger and acquisition of yingde medical as an example,this paper studies and analyzes the problems existing in performance compensation commitment clauses of xinhua medical merger and acquisition.Finally,through the reflection of the case,aiming at the problems existing in the practice of performance compensation commitment clauses,the author puts forward the corresponding Suggestions for improvement.Through case analysis,the motivation of the acquirer to use the performance compensation commitment clause and the unreasonable performance compensation commitment clause lead to the acquirer’s substandard performance and nonperformance.Further analysis shows that the main problems of performance compensation commitment clauses include: performance commitment,incentive clauses and recovery costs for the acquirer;For the acquired party,there are problems of performance target,performance indicator setting and disclaimer;For small and medium-sized investors,there are problems of performance commitment effectiveness,performance commitment change and commitment performance.In view of the above problems,Suggestions on improving performance compensation commitment terms are put forward from the perspective of acquirer,acquiree and small and medium-sized investors.The significance of this paper is that by analyzing the performance compensation commitment clauses,enterprises can reduce and avoid the occurrence of substandard performance and performance loss in m&a,so as to better protect the rights and interests of both parties in m&a and small and medium-sized investors.