Guangdong Guanghua Technology Co., Ltd. Compensation Management System for Directors and Senior Management
Chapter 1 General Provisions
Article 1 To further improve the compensation management of the Company's directors and senior management (hereinafter referred to as "Company"), establish a scientific and effective incentive and restraint mechanism, effectively mobilize the enthusiasm of directors and senior management, and ensure the realization of the Company's development strategy goals, in accordance with the "Company Law," "Corporate Governance Guidelines for Listed Companies," "Articles of Association," and other relevant regulations, and based on full consideration of the Company's actual situation and industry characteristics, this system is hereby formulated.
Article 2 The subjects to which this system applies are the Company's directors and senior management as stipulated in the "Articles of Association."
Article 3 To ensure the Company's healthy, sustainable, and stable development, the compensation system for the Company's directors and senior management follows the following principles: (1) Strict adherence to the management requirements and regulations of the Company's Board of Directors and the Compensation and Assessment Committee; (2) Reflecting the principle that the income level is commensurate with the Company's scale and performance; (3) Reflecting the principle of equal rights, responsibilities, and interests, where compensation is commensurate with the value of the position, the extent of responsibility undertaken, and individual performance; (4) Reflecting the principle of the Company's long-term interests, consistent with the goals of the Company's sustainable development; (5) Reflecting the principle of balancing incentives and restraints, and equal rewards and punishments, where compensation is linked to performance evaluation and rewards and punishments; (6) Reflecting the principle of openness, fairness, and transparency, and maintaining the attractiveness and competitiveness of the Company's compensation by referencing the standards of peer companies and listed companies in the same region, based on the current actual income level.
Chapter 2 Management Structure and Responsibilities
Article 4 The Compensation and Assessment Committee of the Board of Directors is authorized by the Board of Directors to formulate the compensation standards and plans for the Company's directors and senior management. The content includes, but is not limited to, confirmation of the basis, compensation structure, 1 issuance standards, issuance methods, assessment standards, and adjustment plans; it is responsible for reviewing the Company's directors and senior management's performance of duties and conducting annual assessments; it is responsible for supervising the implementation of the Company's compensation system; and it is responsible for initiating procedures for suspending or recovering compensation for matters requiring suspension or recovery under this system.
Article 5 The compensation plan for the Company's directors, after being determined by the Compensation and Assessment Committee of the Board of Directors, shall be submitted to the shareholders' meeting for deliberation and approval, and shall be disclosed. The director concerned shall recuse himself when the Board of Directors or the Compensation and Assessment Committee evaluates or discusses his compensation.
The compensation plan for senior management, after being determined by the Compensation and Assessment Committee of the Board of Directors, shall be submitted to the Board of Directors for deliberation and approval, and then explained to the shareholders' meeting and fully disclosed.
Article 6 The Company's Human Resources Department, Finance Department, and other relevant functional departments shall cooperate with the Compensation and Assessment Committee of the Board of Directors to implement the Company's director compensation plan.
Chapter 3 Compensation Standards