Xiangcai Shares issues new regulations on director and executive compensation and performance evaluation, strengthening the incentive and restraint mechanisms.

China Visit Net data. Xiangcai Co., Ltd. recently reviewed and approved the “Compensation and Performance Appraisal Management System for Directors and Senior Management Personnel,” aiming to further improve corporate governance and establish a scientific, effective incentive and restraint mechanism. The system specifies that the applicable persons include the company’s internal directors, external non-independent directors, independent directors, as well as senior management personnel such as the president, vice presidents, the board secretary, the finance负责人, and others. The compensation framework consists of base compensation, performance compensation, and long-term incentive income. Among them, performance compensation accounts for, in principle, no less than 50% of the total amount, reflecting an outcome-oriented approach. Independent directors will receive an annual stipend, and the reasonable expenses related to fulfilling their duties will be borne by the company.

The system stipulates that the compensation levels of directors and executives must be linked to job responsibilities, risk, the company’s operating performance, and industry benchmarks. Performance appraisals are organized by the Compensation and Appraisal Committee under the board of directors, and the work may be delegated to a third party. A directors’ compensation plan must be submitted to the shareholders’ meeting for approval after being deliberated by the board. Senior management compensation plans are approved by the board, and the relevant information must be disclosed accordingly.

The new rules specifically set up compensation constraints and clawback provisions. If a director or executive is subject to public reprimand by regulators, is determined to be unfit for the post, engages in major illegal or regulatory violations, or seriously neglects duties causing significant losses to the company, the company may reduce or withhold performance compensation and other incentives. At the same time, when the company retrospectively restates financial statements due to issues such as financial fraud, or when relevant personnel are at fault for illegal or regulatory conduct, the company has the right to recover the already paid performance compensation and long-term incentive income. The system takes effect from the date it is approved by the shareholders’ meeting, marking an important step for Xiangcai Co., Ltd. in strengthening the incentive-and-risk sharing mechanism and promoting the company’s sustainable development.

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