Chapter 1 General Principles
Article 1
To further improve the compensation management for directors and senior management of Shantui Construction Machinery Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific and effective incentive and restraint mechanism, effectively motivate directors and senior management, and enhance the Company's operational management efficiency, this system is formulated in accordance with the Company Law of the People's Republic of China, the Code of Corporate Governance for Listed Companies, and the Articles of Association of Shantui Construction Machinery Co., Ltd. (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.
Article 2
The term "directors" in this system includes executive directors, non-executive directors (or external directors), independent directors, and employee representative directors. The term "senior management" refers to the general manager, deputy general managers, financial officer (chief financial officer), board secretary, and other senior management personnel as stipulated in the Articles of Association.
Article 3
The management of compensation for directors and senior management of the Company follows these principles:
- The principle of openness, fairness, and transparency;
- The principle of distribution according to labor, unifying responsibility, authority, and benefits;
- The principle of adapting to market development, combining with the Company's operational goals, actual operating conditions, and performance;
- The principle of aligning with the Company's long-term interests;
- The principle of balancing incentives and constraints.
Article 4
Total salary determination mechanism: The Company conducts budget management for the total salary of directors and senior management. The total salary for directors and senior management is determined comprehensively based on salary standards, the Company's operational performance, external market salary levels, and individual performance.
Chapter 2 Management Institutions
Article 5
The Compensation and Assessment Committee of the Board of Directors is the management body responsible for assessing directors and senior management and formulating compensation.
Article 6
The specific compensation plans for directors and senior management are formulated by the Compensation and Assessment Committee of the Board of Directors, clarifying the basis for determining compensation and its specific components. The compensation plan for directors is decided by the shareholders' meeting and disclosed. When the Board of Directors or the Compensation and Assessment Committee evaluates or discusses the compensation of an individual director, that director must abstain. The compensation plan for senior management is approved by the Board of Directors, explained to the shareholders' meeting, and fully disclosed.
Article 7
Relevant functional departments of the Company are responsible for the specific implementation of the compensation plans for directors and senior management.