Guangdong Zhongsheng Pharmaceutical Co., Ltd. Compensation Management System for Directors and Senior Management
Chapter 1 General Provisions
Article 1 To ensure that the directors and senior management of Guangdong Zhongsheng Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company") perform their duties in accordance with the law, further standardize the compensation management of directors and senior management, establish a scientific, standardized, and reasonable incentive and restraint mechanism, fully mobilize the work enthusiasm of directors and senior management, and promote the sustained, stable, and healthy development of the Company, in accordance with the "Company Law of the People's Republic of China," the "Guiding Principles for the Corporate Governance of Listed Companies," and other relevant laws and regulations, as well as the "Articles of Association" and the Company's actual situation, this management system is hereby formulated.
Article 2 This system applies to all directors and senior management as stipulated in the "Articles of Association." The term "director" as used in this system refers to all incumbent members of the Board of Directors during the period of execution of this system. Among them, directors are composed of internal non-independent directors (hereinafter referred to as "internal directors"), external non-independent directors (also known as "full-time external directors"), and independent directors.
(1) Internal directors: Refers to senior management personnel of the Company or other employees who are concurrently non-independent directors and have signed an employment contract or labor contract with the Company;
(2) Full-time external directors: Refers to non-independent directors who do not hold any other positions in the Company besides their directorship;
(3) Independent directors: Refers to directors appointed by the Company in accordance with the "Administrative Measures 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.
The term "senior management personnel" as used in this system refers to the president, vice presidents, financial controller (chief financial officer), board secretary, and other senior management personnel as stipulated in the Articles of Association, who are appointed by the Board of Directors.
Article 3 The compensation management system for the Company's directors and senior management adheres to the following principles:
(1) Principle of fairness: Reflects the principle that income levels are consistent with the Company's scale and performance, while also considering market compensation levels;
(2) Principle of commensurate responsibility, rights, and benefits: Reflects the matching of compensation with the value of the position and the extent of responsibilities and obligations fulfilled;
(3) Principle of long-term development: Reflects the alignment of compensation with the Company's long-term interests and the goal of sustained and healthy development;
(4) Principle of balancing incentives and constraints: Reflects the linkage of compensation payment with assessment, rewards and punishments, and incentive mechanisms.
Chapter 2 Compensation Management
Article 4 The Company's total payroll determination mechanism: The Company will reasonably formulate the annual total payroll based on its development strategy and compensation strategy, annual production and operation goals, economic benefits, and considering factors such as labor productivity improvement, labor cost input-output ratio, and market benchmarking of employee wages.