Chapter 1 General Principles
Article 1
To further improve the compensation management system for directors and senior management of Anhui Tuoshan Heavy Industry Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific and effective incentive and restraint mechanism, and fully mobilize the enthusiasm and creativity of directors and senior management, this system is formulated in accordance with the Company Law of the People's Republic of China, the Guidelines for Corporate Governance of Listed Companies, and other relevant laws and regulations, as well as the Articles of Association of Anhui Tuoshan Heavy Industry Co., Ltd. (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.
Article 2
This system applies to the following personnel:
- Directors, including independent directors and non-independent directors (including employee representative directors);
- Senior management, including the general manager, deputy general managers, financial director, board secretary, and other senior management as stipulated in the Articles of Association.
Article 3
The determination of compensation for directors and senior management shall follow the principles below:
- Fairness Principle: Reflects that income levels are commensurate with the Company's scale and performance while considering external compensation levels;
- Unity of Responsibility, Authority, and Interests Principle: Reflects that compensation corresponds to the value of the position and the extent of responsibilities;
- Long-term Development Principle: Reflects that compensation aligns with the goals of the Company's sustainable and healthy development;
- Balance of Incentives and Constraints Principle: Reflects that compensation distribution is linked to assessments, rewards, and the Company's incentive mechanisms.
Chapter 2 Management Institutions
Article 4
The Compensation and Assessment Committee of the Board of Directors is responsible for drafting the compensation standards, distribution mechanisms, payment and recovery arrangements for directors and senior management under the authorization of the Board of Directors, clarifying the basis for determining compensation and its specific components; reviewing the performance of directors and senior management and conducting annual assessments; and supervising the implementation of the Company's compensation system.
Article 5
The compensation plan for directors shall be 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 shall abstain. The compensation plan for senior management shall be approved by the Board of Directors, explained to the shareholders' meeting, and fully disclosed.
Article 6
The Human Resources Department of the Company assists the Compensation and Assessment Committee of the Board of Directors in formulating and implementing the compensation plans for directors and senior management.