Chapter 1 General Principles
Article 1
To further improve the compensation management for directors and senior management of Shanghai Weihong Electronics Technology Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific and effective incentive and restraint mechanism, effectively motivate the work enthusiasm and creativity of the Company's directors and senior management, and promote the Company's stable operation and sustainable development, this system is formulated in accordance with the "Company Law of the People's Republic of China," "Code of Corporate Governance for Listed Companies," and other relevant laws, regulations, normative documents, and the "Articles of Association of Shanghai Weihong Electronics Technology 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 Company's directors and senior management, specifically including the following personnel:
- Independent Directors: Refers to directors appointed by the Company in accordance with relevant regulations, who have no direct or indirect interests with the Company and major shareholders, or other relationships that may affect their independent and objective judgment.
- Non-independent Directors: Includes internal and external directors. External directors refer to non-independent directors who do not hold positions other than that of director in the Company; internal directors refer to non-independent directors who also hold other positions in the Company.
- Senior Management: Refers to the Company's general manager, deputy general managers, financial director, board secretary, and other senior management personnel recognized by the Articles of Association.
Article 3
The compensation management system for the Company's directors and senior management follows the following principles:
- Principle of Fairness: Income levels are linked to the Company's scale and performance while considering market compensation levels to maintain competitive salary levels.
- Principle of Unity of Responsibility, Authority, and Interests: Compensation corresponds to the value of the position and the extent of responsibilities.
- Principle of Balance between Incentives and Constraints: Compensation distribution is linked to assessments and rewards and penalties, as well as the incentive mechanism.
- Principle of Shared Risks and Long-term Development: The compensation system reflects shared benefits and risks with the Company, coordinating short-term and long-term incentives to promote sustainable development and value maximization.
Chapter 2 Management Institutions
Article 4
The shareholders' meeting is responsible for reviewing and confirming the compensation of the Company's directors and ensuring full disclosure.
Article 5
The board of directors is responsible for approving the compensation of senior management and must explain this to the shareholders' meeting, ensuring full disclosure.
Article 6
The Compensation and Assessment Committee of the board of directors is responsible for formulating the compensation standards and distribution for the Company's directors and senior management; reviewing the performance of the Company's directors and senior management and conducting annual assessments; supervising the implementation of the Company's compensation system; and making recommendations to the board of directors regarding the compensation of directors and senior management. The performance evaluation of directors and senior management is organized by the Compensation and Assessment Committee, and the Company may entrust a third party to conduct performance evaluations. The evaluation of independent directors is conducted through self-evaluation and mutual evaluation. When the board of directors or the Compensation and Assessment Committee evaluates individual directors or discusses their compensation, the concerned director must abstain.
Article 7
The Company's human resources department is responsible for assisting the Compensation and Assessment Committee of the board of directors in the specific implementation and management of the compensation plans for the Company's directors and senior management.