Shanghai Hongda New Material Co., Ltd.
Compensation Management System for Directors and Senior Management
Chapter 1 General Provisions
Article 1 To further strengthen the compensation management of directors and senior management of Shanghai Hongda New Material Co., Ltd. (hereinafter referred to as the "Company"), effectively motivate directors and senior management, establish and improve a sound incentive and restraint mechanism compatible with modern corporate governance, maintain the stability of the core management team, and enhance the Company's business performance and management level, in accordance with the "Company Law of the People's Republic of China" (hereinafter referred to as the "Company Law") and other relevant laws and regulations, and the "Articles of Association of Shanghai Hongda New Material Co., Ltd." (hereinafter referred to as the "Articles of Association"), and the "Work Rules of the Board of Directors' Compensation and Assessment Committee," and in combination with the Company's actual situation, this system is hereby formulated.
Article 2 For the purposes of this system, directors refer to all incumbent members of the Company's board of directors during the period this system is in effect, including internal directors, external directors, and independent directors. Internal directors refer to employees of the Company or company management personnel who concurrently serve as directors and have signed an employment contract or labor contract with the Company. External directors refer to non-independent directors who do not hold any other positions in the Company besides director. Independent directors refer to directors appointed by the Company in accordance with the "Rules for Independent Directors of Listed Companies" who do not have any relationship with the Company and its major shareholders that may hinder their independent and objective judgment.
For the purposes of this system, senior management personnel refer to the general manager, deputy general managers, secretary of the board of directors, and chief financial officer.
Article 3 The compensation management of directors and senior management shall adhere to the following principles:
- Fairness principle: Reflecting that the income level is in line with the Company's scale and performance, while also considering the market compensation level;
- Unity of responsibility, rights, and interests principle: Reflecting that compensation is commensurate with the value of the position and the extent of responsibilities and obligations;
- Long-term development principle: Reflecting that compensation is aligned with the Company's sustainable and healthy development goals;
- Principle of equal emphasis on incentives and restraints: Reflecting that compensation is linked to performance appraisal, rewards and punishments, and incentive mechanisms;
- Fair distribution of compensation principle: Reasonably determining the compensation distribution ratio among directors, senior management personnel, and ordinary employees, tilting towards key positions, the front line of production, and urgently needed high-level, high-skilled talents, and promoting the improvement of ordinary employees' compensation levels.
Chapter 2 Management Structure