Effectiveness of performance compensation commitment under Information Inequality
The demand of information society promotes the production of performance compensation commitment, which is used to alleviate the information asymmetry between investors and listed companies. The generation of performance compensation commitments has reduced valuation difficulties and other problems...
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| Format: | Article |
| Language: | English |
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EDP Sciences
2021-01-01
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| Series: | E3S Web of Conferences |
| Online Access: | https://www.e3s-conferences.org/articles/e3sconf/pdf/2021/11/e3sconf_netid2021_03082.pdf |
| _version_ | 1818406614169812992 |
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| author | Zhou Yuhang |
| author_facet | Zhou Yuhang |
| author_sort | Zhou Yuhang |
| collection | DOAJ |
| description | The demand of information society promotes the production of performance compensation commitment, which is used to alleviate the information asymmetry between investors and listed companies. The generation of performance compensation commitments has reduced valuation difficulties and other problems to a certain extent, lowered M&A costs and improved M&A efficiency. However, as the sample size increases, its drawbacks have gradually emerged. Youbo Pharmaceutical has stepped on the line for three consecutive years to achieve accurate performance. After the commitment period expires, the performance has dropped by more than 50%, so the authenticity of its performance has been questioned. Through the analysis of its announcement and various indicators, I find that the performance compensation commitment can not bring good market reaction after the commitment period, nor can it improve the integration effect, and even there are some behaviors such as premium, goodwill impairment risk and earnings management. |
| first_indexed | 2024-12-14T09:14:44Z |
| format | Article |
| id | doaj.art-2ee53876a3f248e2b056ea59cdd66877 |
| institution | Directory Open Access Journal |
| issn | 2267-1242 |
| language | English |
| last_indexed | 2024-12-14T09:14:44Z |
| publishDate | 2021-01-01 |
| publisher | EDP Sciences |
| record_format | Article |
| series | E3S Web of Conferences |
| spelling | doaj.art-2ee53876a3f248e2b056ea59cdd668772022-12-21T23:08:29ZengEDP SciencesE3S Web of Conferences2267-12422021-01-012350308210.1051/e3sconf/202123503082e3sconf_netid2021_03082Effectiveness of performance compensation commitment under Information InequalityZhou Yuhang0Beijing Jiaotong UniversityThe demand of information society promotes the production of performance compensation commitment, which is used to alleviate the information asymmetry between investors and listed companies. The generation of performance compensation commitments has reduced valuation difficulties and other problems to a certain extent, lowered M&A costs and improved M&A efficiency. However, as the sample size increases, its drawbacks have gradually emerged. Youbo Pharmaceutical has stepped on the line for three consecutive years to achieve accurate performance. After the commitment period expires, the performance has dropped by more than 50%, so the authenticity of its performance has been questioned. Through the analysis of its announcement and various indicators, I find that the performance compensation commitment can not bring good market reaction after the commitment period, nor can it improve the integration effect, and even there are some behaviors such as premium, goodwill impairment risk and earnings management.https://www.e3s-conferences.org/articles/e3sconf/pdf/2021/11/e3sconf_netid2021_03082.pdf |
| spellingShingle | Zhou Yuhang Effectiveness of performance compensation commitment under Information Inequality E3S Web of Conferences |
| title | Effectiveness of performance compensation commitment under Information Inequality |
| title_full | Effectiveness of performance compensation commitment under Information Inequality |
| title_fullStr | Effectiveness of performance compensation commitment under Information Inequality |
| title_full_unstemmed | Effectiveness of performance compensation commitment under Information Inequality |
| title_short | Effectiveness of performance compensation commitment under Information Inequality |
| title_sort | effectiveness of performance compensation commitment under information inequality |
| url | https://www.e3s-conferences.org/articles/e3sconf/pdf/2021/11/e3sconf_netid2021_03082.pdf |
| work_keys_str_mv | AT zhouyuhang effectivenessofperformancecompensationcommitmentunderinformationinequality |