Chapter 1 General Principles
Article 1
To further improve the compensation management for directors and senior management (hereinafter referred to as "senior management") of Huanrui Century United Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific and effective incentive and restraint mechanism, ensure the stability of the management team, and effectively motivate the enthusiasm, initiative, and creativity of directors and senior management, thereby improving the company's operational management level, promoting healthy, sustainable, and stable development, and ensuring the achievement of the company's strategic development goals, this system is formulated based on the actual situation of the company and with reference to industry compensation levels.
Article 2
This system applies to directors and senior management.
Article 3
The term "directors" in this system refers to both independent directors and non-independent directors (including employee representative directors). Independent directors are those appointed by the company in accordance with the "Administrative Measures for Independent Directors of Listed Companies," who have no relationships with the company or its major shareholders that may hinder their independent and objective judgment; non-independent directors (including employee representative directors) include internal directors and external directors. Internal directors are non-independent directors who also hold other positions in the company besides that of a director; external directors are non-independent directors who do not hold any positions in the company besides that of a director.
Article 4
The term "senior management" in this system refers to the general manager (also known as the president), deputy general managers (also known as vice presidents), financial directors (also known as financial heads), board secretaries, and other personnel determined by the board of directors.
Article 5
The determination of compensation for directors and senior management follows these principles:
- Compensation is linked to responsibilities;
- Compensation is tied to the company's operational performance;
- Compensation is combined with diligence and responsibility;
- Compensation is associated with the stability of the management team and the company's sustainable development;
- Compensation is integrated with incentive and restraint mechanisms.
Chapter 2 Compensation Management Organization
Article 6
The compensation plan for directors and senior management is formulated by the board's compensation and assessment committee, which clarifies 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 or the compensation and assessment committee evaluates or discusses the remuneration of individual directors, the concerned director must abstain. The compensation plan for senior management is approved by the board and explained to the shareholders' meeting, with full disclosure.