Chapter 1 General Principles
Article 1
To improve the incentive and restraint mechanisms for the directors and senior management of Hangzhou Guotai Environmental Technology Co., Ltd. (hereinafter referred to as "the Company"), enhance management efficiency, fully leverage the enthusiasm of directors and senior management, strengthen cohesion, promote the growth of company benefits, and maximize shareholder interests, this management system is formulated based on the actual situation of the Company.
Article 2
The directors and senior management referred to in this system include members of the board of directors, the general manager, deputy general managers, financial directors, board secretaries, and other personnel classified as senior management in the Company’s articles of association.
Article 3
The compensation level for directors and senior management is determined based on the Company's scale and performance, according to the Company's operational plan, the division of responsibilities of directors and senior management, and taking into account factors such as income levels in the same industry.
Article 4
The determination of compensation for the Company's directors and senior management shall adhere to the following principles:
- Compensation levels shall reference standards of similar listed companies in the same industry and region, ensuring openness, fairness, and transparency.
- Compensation levels shall be combined with the Company's operational performance and long-term interests, and be appropriate to the Company's scale.
- The principle of distribution according to labor shall be combined with responsibilities, rights, and benefits.
- Performance shall take precedence, reflecting the value distribution principle of sharing company profits and bearing risks.
- Equal emphasis on incentives and constraints, and equivalence of rewards and penalties.
Chapter 2 Management Institutions
Article 5
The compensation plan for directors and senior management shall be formulated by the Compensation and Assessment Committee of the Board of Directors. The Committee, authorized by the Board, is responsible for establishing the compensation standards and plans for the Company's directors and senior management; reviewing the performance of directors and senior management; evaluating whether to initiate recovery procedures for performance-based compensation for specific directors and senior management; and supervising the implementation of the Company's compensation system.
Article 6
The compensation plan for directors shall be decided by the shareholders' meeting. When the Board or the Compensation and Assessment Committee evaluates or discusses the compensation of individual directors, the concerned director shall abstain.
Article 7
The compensation plan for senior management shall be approved by the Board of Directors, explained to the shareholders' meeting, and fully disclosed.
Article 8
If the Company incurs losses, it shall specifically explain whether changes in the compensation of directors and senior management meet performance linkage requirements during the review of their compensation.