Chapter 1 General Principles
Article 1
To further improve the remuneration management of directors and senior management at Rongsheng Real Estate Development Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific and effective incentive and restraint mechanism, and promote the sustainable development of the Company, 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 other laws, regulations, and normative documents, as well as the Articles of Association of Rongsheng Real Estate Development Co., Ltd. (hereinafter referred to as "the Articles of Association"), combined with the Company's strategic development and actual situation. This system includes the total wage determination mechanism, remuneration structure for directors and senior management, performance evaluation, remuneration distribution, and clawback provisions.
Article 2
This system applies to the Company's directors, president, vice presidents, chief financial officer, board secretary, and other senior management personnel appointed by the board of directors.
Article 3
The remuneration of the Company's directors and senior management should be aligned with market development, matched with the Company's operational performance and individual performance, and coordinated with the Company's sustainable development. The remuneration management for directors and senior management follows these principles:
- Performance-oriented principle: Remuneration should match the scale of the Company's operations, and remuneration distribution should be linked to performance evaluation results.
- Balance of incentive and restraint principle: Remuneration should be linked to job responsibilities and the completion of work objectives, as well as to assessment, rewards, and penalties.
- Fairness and justice principle: Standards should be fair, procedures transparent, and distribution just. Remuneration levels should reflect job value, responsibilities, management difficulty, and internal fairness, while also considering market remuneration levels.
- Principle of combining individual remuneration with the Company's long-term interests.
- Principle of coordination with industry cyclical development.
Chapter 2 Remuneration Formulation and Review Process
Article 4
The board of directors' remuneration and assessment committee is responsible for formulating assessment standards for the Company's directors and senior management and conducting evaluations. According to the Company's remuneration management system, the committee will annually formulate and review the remuneration policies and plans for directors and senior management, clarifying the basis for remuneration determination and specific components. The committee will make recommendations to the board of directors on the following matters, including but not limited to:
- Remuneration for directors and senior management;
- Formulation or modification of equity incentive plans and employee stock ownership plans, including conditions for the exercise of rights by authorized beneficiaries;
- Shareholding plans for directors and senior management in proposed spin-off subsidiaries;
- Other matters as stipulated by laws, regulations, and the Articles of Association.
Article 5
The evaluation of independent directors' performance will be conducted through self-evaluation and mutual evaluation.