The Impact Of Performance Commitment On The Interests Of Small And Medium Shareholders

In recent years,mergers and acquisitions have become increasingly active.Listed companies all expect to achieve leapfrog development through mergers and acquisitions.However,the risks are gradually emerging.Therefore,China Securities Regulatory Commission formally promulgated the measures for the administration of major assets reorganization of listed companies in 2008 to promote the successful completion of mergers and reorganizations of listed companies and protect the interests of both parties and small and medium shareholders.But in the actual process of mergers and acquisitions,due to information asymmetry,the rights of small and medium-sized shareholders with little information and low voice are not guaranteed.In recent years,the phenomenon of high value,high commitment and low fulfillment of performance commitment is common in mergers and acquisitions.What's more,the large shareholders in order to reduce the negative effect of performance compensation on themselves,using various means to occupy the interests of small and medium-sized shareholders.So far,many people dispute and question the rationality and validity of performance commitment.Nowadays,there are many problems about performance commitment.Therefore,this paper hopes that through the case study of Qianshan Pharmaceutical Machinery Company,it can put forward preventive suggestions and reasonable measures for the impact of performance commitment on the interests of small and medium-sized shareholders.This paper studies the relationship between performance commitment and the interests of small and medium-sized shareholders by studying a series of internal and external reactions caused by high valuation of performance commitment and failure to fulfill the commitment in the later period.Firstly,this paper introduces the development status of performance commitment,the general situation of signing performance commitment in the merger and reorganization of Qianshan Pharmaceutical Machinery Company and the specific performance of Lefudi.After that,in order to explore the actual effect of performance commitment on the protection of the interests of small and medium-sized shareholders and put forward corresponding suggestions,we use comparative analysis and event study to analyze the changes of internal financialsituation and external market effect of Qianshan Pharmaceutical Machinery Company before and after the commitment period.The results are as follows: firstly,the lack of detailed asset evaluation and incomplete information disclosure lead to the small and medium-sized shareholders being blinded by the signed performance commitments,not knowing the actual business situation of the merged party.Ultimately,the failure of the counterparty to fulfill the commitments leads to the loss of the interests of small and medium-sized shareholders.Secondly,the high valuation leads to the loss of performance even a huge loss,which is a heavy blow to the investment confidence of small and medium-sized shareholders.Thirdly,during the commitment period,the imperfect external supervision and the irresponsible internal supervision of the company are also the important reasons for the unfinished performance commitment and the long-standing failure of compensation,which further erodes the vital interests of small and medium-sized shareholders.In view of the above situation,this paper puts forward some suggestions on strengthening the external market supervision,implementing the internal performance commitment system and rational investment of small and medium shareholders.