Mechanism Analysis of Performance Compensation Commitment Affecting the Value of the Underlying Enterprise
In this paper,we take the factors affecting the value of the subject enterprise as the research perspective and take the performance compensation commitment as the entry point,study the motives and economic consequences of the application of the performance compensation commitment to the value of the subject assets from a holistic framework,and we find that:the M&A premium rate of the subject enterprise that has signed the performance compensation agreement is significantly higher than the premium rate of the subject enterprise that has not signed the performance compensation agreement;compared with the enterprise that has not signed the agreement,the enterprise that has signed the performance compensation agreement have better operating performance after the completion of M&A;Specific elements in the performance commitment agreement will have an impact on the fulfillment of the commitment.The conclusion of this paper provides new empirical data for the study of enterprise value assessment,expands and enriches the research related to the setting of performance commitment clauses,provides new ideas for asset appraisal professionals to participate in M&A and restructuring in the future and it is of certain reference significance for optimizing the pricing mechanism of M&A.
Performance commitmentsAsset valuationMergers and Acquisitions