Chapter 1 General Principles
Article 1
To further improve the compensation management for directors and senior management of Nantong Taihe Chemical Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific and effective incentive and restraint mechanism, effectively motivate the enthusiasm and initiative of the Company's directors and senior management, and promote the sustainable and healthy development of the Company, these measures are formulated in accordance with the "Company Law of the People's Republic of China," "Guidelines for the Governance of Listed Companies," and other relevant laws and regulations, as well as the provisions of the "Articles of Association of Nantong Taihe Chemical Co., Ltd." (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.
Article 2
These measures apply to the directors and senior management as stipulated in the Articles of Association.
Article 3
The determination of compensation for the Company's directors and senior management shall follow the principles below:
- Fairness Principle: Income levels are linked to the Company's development scale and performance, while also considering market compensation levels to ensure competitiveness.
- Unity of Responsibility, Authority, and Interests Principle: Compensation corresponds to the value of the position and the extent of responsibilities undertaken.
- Long-term Development Principle: Compensation aligns with the goals of the Company's sustainable and healthy development.
- Balance of Incentives and Constraints Principle: Compensation distribution is linked to assessments, rewards, penalties, and incentive mechanisms.
Chapter 2 Compensation Management Organization
Article 4
The Compensation and Assessment Committee of the Board of Directors is responsible for formulating and reviewing the compensation policies and plans for directors and senior management, establishing assessment standards, organizing evaluations, and making recommendations to the Board on the following matters:
- Compensation for directors and senior management;
- Formulation or modification of equity incentive plans and employee stock ownership plans, including conditions for the exercise of rights by the incentivized parties;
- Plans for stock ownership arrangements for directors and senior management in proposed spin-offs of subsidiaries;
- Other matters as stipulated by laws, regulations, and the Articles of Association.
Article 5
The compensation plan for directors shall be reviewed and approved by the shareholders' meeting and disclosed. When the Board or the Compensation and Assessment Committee evaluates or discusses the compensation of an individual director, that director shall abstain from the discussion. The compensation plan for senior management shall be reviewed and approved by the Board and explained to the shareholders' meeting, with full disclosure.
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 to implement the compensation plans for directors and senior management.