Chapter 1 General Principles
Article 1
To further improve the compensation management of directors and senior management at Nanjing Hongtaiyang Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific and effective incentive and restraint mechanism, encourage directors and senior management to actively participate in business decision-making, management, and supervision, and promote the healthy and sustainable development of the Company, this system is formulated in accordance with the Company Law of the People's Republic of China, the Guidelines for the Governance of Listed Companies, and other relevant laws, regulations, normative documents, and the provisions of the Articles of Association, combined with the actual situation of the Company.
Article 2
This system applies to:
- Company directors: including non-independent directors (including employee representative directors) and independent directors;
- Company senior management: including the general manager, deputy general managers, board secretary, financial director, and other senior management recognized by the Articles of Association.
Article 3
The distribution and assessment of compensation for directors and senior management are based on the Company's economic benefits, comprehensive assessments according to the annual business plan and the work objectives of senior management, and the annual compensation distribution is determined based on assessment results.
Article 4
The determination of compensation for directors and senior management follows these principles:
- Fairness principle: Compensation levels should align with the Company's scale and performance while appropriately referencing external compensation levels;
- Unity of responsibility, authority, and benefits principle: Reflecting the correspondence between compensation and the value of positions and the extent of responsibilities;
- Long-term development principle: Compensation should align with the Company's goals for sustainable and healthy development;
- Balance of incentives and constraints principle: Reflecting the linkage between compensation distribution and assessment results, rewards, and penalties.
Chapter 2 Compensation Management Organization
Article 5
The Company's Board of Directors' Compensation and Assessment Committee (hereinafter referred to as "the Committee") is responsible for formulating assessment standards for directors and senior management, conducting assessments, and developing and reviewing the compensation decision-making mechanism and processes.
Article 6
The compensation plans for directors and senior management are formulated by the Committee, specifying the basis for determining compensation and its specific components. The compensation plan for directors is approved by the Board of Directors and then decided by the shareholders' meeting, with disclosure. When the Board or the Committee evaluates or discusses the compensation of an individual director, that director must abstain.
Article 7
The performance evaluation of directors and senior management is organized by the Committee, and the Company may entrust a third party to conduct performance evaluations. The evaluation of independent directors is conducted through self-evaluation and mutual evaluation.
Article 8
The Board of Directors shall report to the shareholders' meeting on the performance of directors, evaluation results, and their compensation, which shall be disclosed by the Company.
Article 9
The Committee is responsible for supervising the implementation of this system after it has been approved by the Board of Directors and the shareholders' meeting.
Article 10
The Company's human resources, finance, and other departments are responsible for assisting the Committee in the specific implementation of this system.
Chapter 3 Composition, Standards, and Decision Mechanism of Compensation
Article 11
Total wages refer to the total labor remuneration directly paid to all employees in monetary form within a certain period, including basic salary, performance salary, medium- and long-term incentive income, and various allowances and subsidies.