Chapter 1 General Principles
Article 1
To improve the compensation management for directors and senior management of Good Electric Materials System (Suzhou) Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific and effective incentive and restraint mechanism, effectively motivate the work enthusiasm of the Company's directors and senior management, and enhance the operational management efficiency of the Company, this system is formulated in accordance with the "Company Law of the People's Republic of China," "Code of Corporate Governance for Listed Companies," "Shenzhen Stock Exchange GEM Listing Rules," and other relevant laws and regulations, as well as the provisions of the "Articles of Association of Good Electric Materials System (Suzhou) Co., Ltd." (hereinafter referred to as "the Articles of Association"), combined with the Company's existing compensation management system.
Article 2
This system applies to the directors and senior management as stipulated in the Articles of Association.
Article 3
The compensation management for the Company's directors and senior management shall follow the principles below:
- Fairness principle, reflecting that income levels are commensurate with the Company's scale and performance, and are consistent with external compensation levels;
- Principle of equivalence of responsibility, authority, and benefits, reflecting that compensation corresponds to the value of the position and the size of the responsibilities undertaken;
- Long-term development principle, reflecting that compensation aligns with the goal of the Company's sustainable and healthy development;
- Principle of balancing incentives and constraints, reflecting that compensation distribution is linked to assessment, rewards and penalties, and incentive mechanisms.
Article 4
The Company shall determine the compensation distribution ratio for directors, senior management, and ordinary employees based on industry levels, development strategies, and position values, promoting compensation distribution towards key positions, frontline production, and urgently needed high-level, high-skill talents, thereby enhancing the compensation level of ordinary employees.
Chapter 2 Compensation Management Organization
Article 5
The Company's shareholders' meeting is responsible for reviewing the compensation management plan for the Company's directors, while the board of directors is responsible for reviewing the compensation management plan for senior management.
Article 6
The Compensation and Assessment Committee of the board of directors is responsible for formulating assessment standards for directors and senior management and conducting assessments, formulating and reviewing compensation policies and plans for directors and senior management, and making recommendations to the board of directors on the following matters:
- Compensation for directors and senior management;
- Formulation or modification of equity incentive plans and employee stock ownership plans, and the achievements of authorized benefits and conditions for exercising rights;
- 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.
If the board of directors does not adopt or fully adopt the recommendations of the Compensation and Assessment Committee, it shall record the opinions of the Compensation and Assessment Committee and the specific reasons for non-adoption in the board resolution and disclose them.