Incorporating ESG Performance into Executive Compensation

The evaluation of senior management’s performance, along with the policies, frameworks, standards, and structures governing their variable compensation, is established by the Remuneration Committee. By incorporating ESG (Environmental, Social, and Governance) principles, the company seeks to align senior management’s responsibilities with its sustainability objectives. Variable compensation for senior executives is tied to both financial and ESG performance metrics, ensuring that corporate and managerial goals are closely integrated.
Starting in 2024, long-term incentives for senior management will be implemented through a ownership trust, with a 10-year vesting period and clawback provisions. This approach ensures alignment with the company’s long-term performance and shareholder returns.

The company provides an externally competitive and internally equitable compensation management system, while also regularly reviewing and adjusting the compensation structure to ensure the strategy aligns with market competitiveness.

The goal is to retain top talent effectively to ensure the company maintains sufficient market competitiveness.

In addition to offering bonuses based on business performance, the company also establishes various bonus systems, such as profit-sharing bonuses, employee dividends, innovation research funds, and proposals for improving business performance. If annual performance meets the targets, employees are rewarded with bonuses. For example, the company allocates 0.5% to 2% of its annual net profit as employee bonuses.To ensure that the company maintains a competitive compensation strategy, the talent compensation plan undergoes annual reviews. These reviews consider government-mandated minimum wage adjustments in various locations, alongside customized salary adjustment strategies based on individual work performance. The plan also involves regular salary market benchmarking to implement new compensation adjustment programs.For new hires, employee wages are determined based on individual educational background, work experience, and professional ability (with no discrimination based on age, gender, ethnicity, religion, or any other factors). Compensation is also reviewed in line with local government-mandated minimum wage adjustment policies.