The purpose of the remuneration committee is to assist the Board of Directors in implementing and evaluating the Company’s overall remuneration and benefits policies, as well as the remuneration of directors and managers. According to the Articles of Association of the Renumeration Committee of Eurocharm Holdings, the committee consists of three independent directors, among them which an independent director was elected by all members to serve as the convener and chairman of the meeting. Currently, independent director Yen-Hsi Lin serves as the convener and chairman of the meeting. The remuneration committee holds at least two regular meetings a year, and four meetings were held in 2023. The average attendance rate of all members in person is 100%, and a total of 4 proposals related to compensation and remuneration were discussed.
On October 4, 2021, Ernst & Young Business Advisory Services Inc. was commissioned to conduct the “2021 Annual External Board Performance Evaluation.” On November 2, 2021, the “2021 Annual Board Member Self-Assessment” and “Functional Committee Member Self-Assessment” were conducted. The evaluation results for all assessments were considered “satisfactory,” and all the specified indicators were duly completed. The result was presented at the Board meeting on February 25, 2022. For more details, please refer to the Board Performance Evaluation Report (including the Functional Committee Performance Evaluation). On December 30, 2022, the “2022 Annual Board Internal Performance Evaluation and Board Member Self-Assessment” and “Functional Committee Member Self-Assessment”, which was presented to the Board on February 24, 2023. On December 26, 2023, the “2023 Annual Board Internal Performance Evaluation and Board Member Self-Assessment” and “Functional Committee Member Self-Assessment” were conducted. The evaluation results were considered “satisfactory”, which is expected to be reported on the Board Meeting of the first quarter of 2024.
| Title | Name | Experience (Education) |
|---|---|---|
| Chairman | Yen-Hsi Lin | Philosophy, Fu Jen Catholic University General Manager, DDI-Asia/Pacific International Ltd. (Taiwan) Senior Advisor, Asia/Pacific Region, Caliper Human Strategies |
| Independent Director | Chen-Tien Yuan | Law-National Taiwan University MBA, Guanghua School of Management, Peking University Vice President, EY Management Services Inc. |
| Independent Director | Yi-Jen Kuo | Transportation Engineering and Management, National Chiao Tung University Administrator, China Steel Corporation Manager, China Steel Aluminum Corporation President, China Steel Global Trading Corporation |
| Item | Unit | 2021 | 2022 | 2023 |
|---|---|---|---|---|
| Number of Meetings | times | 2 | 4 | 2 |
| Attendance Rate | % | 100 | 100 | 100 |
| Motions Reviewed | cases | 4 | 9 | 4 |
| Meeting Date | Content | Opinions and Suggestions from the Remuneration Committee and the Measures in Response |
|---|---|---|
| 02/24/2023 | ● Distribution of Directors’ and employees’ remuneration in 2022 ● Revisions for the relevant guidelines of the subsidiary companies | Unanimous consent |
| 08/08/2023 | ● Distribution of remuneration for the Directors in 2022 ● Distribution of remuneration for the Company’s managers in 2022 | Unanimous consent |
The policies, standards, and portfolios for the payment of remuneration
The director’s remuneration shall be determined in accordance with Article 34.1 of the Company’s articles of association. The remuneration for performing duties, according to the degree of participation and contribution value of individual directors, shall be determined and negotiated by the Board of Directors referring to other companies in the industry. In addition, if the Company has a profit in the current year, according to the provisions of Article 34.1 of the Company’s articles of association, it may be used as the remuneration of the directors of the current year within the limit of 2% of the profit of the current year. The Company regularly evaluates the remuneration of directors in accordance with the “Measures for the Performance Evaluation of the Board of Directors”. The performance measurement standard of the chairman is based on the results of the Company’s annual operating indicators related to operations, governance, and financial results. The evaluation scope includes pre-tax net profit, customer Satisfaction and corporate governance evaluation and other three indicators, related performance evaluation and remuneration rationality are reviewed by the Remuneration Committee and the Board of Directors.
The Company’s managers’ remuneration is based on various work allowances and bonuses specified in the “Remuneration Management Regulations” to show compassion and reward employees for their hard work at work. In addition, if the company makes a profit in the current year, it shall allocate no less than 2% of the net profit as employee compensation in accordance with Article 34.1 of the company’s articles of association. The performance evaluation results carried out by the company in accordance with the “Performance Management Regulations” are used as a reference for the issuance of managers’ bonuses. Managers’ performance evaluation items are divided into two major parts: financial indicators and non-financial indicators, and the remuneration for their operating performance is calculated, and review the remuneration system at any time according to the actual operating conditions and relevant laws and regulations.
Procedures of Determining the Remuneration
To regularly evaluate the remuneration for directors and senior managers, the assessment results are in accordance with the “Board of Directors Performance Evaluation Method” and “Workload of Each Functional Committee” for the directors, and the “Compensation Management Method” for managers and employees, respectively.
The self-evaluation results of the members of the Board of Directors and the various functional committees for the year 2023 all significantly exceeded the standards. In addition, measures to prevent unnecessary spending were carried out. As a result, the Company’s profit has exceeded expectations, and all performances of all managers have met or exceeded the targets in 2023. The Company’s annual operational indicators have also reached the highest standards for the year 2023.
The performance assessment and compensation of the directors and managers are evaluated and reviewed annually by the Remuneration Committee and the Board of Directors. In addition to individual performance achievement rate and contribution to the Company, the evaluation also considers the overall operational performance of the Company, future risks in the industry and development trends. The Company also regularly reviews the remuneration system in accordance with the actual business situation and relevant laws and regulations. Furthermore, after considering the current trend of corporate governance, reasonable compensation is provided to achieve a balance between sustainable business and risk management. The actual amount of remuneration for directors and managers for the year 2023 is determined by the Board of Directors based on the proposals from the Remuneration Committee.
Relevance to the Business Performance and Future Risks
- The review of the Company’s remuneration policy, payment standards, and system is primarily based on the overall operational status. In addition, the payment standard is associated with performance achievement rates and contribution levels to enhance the team effectiveness of the Board of Directors and the management department. Moreover, to retain outstanding management talents, industry salary standards serve as a reference to ensure that the compensation for our management level is competitive within the industry.
- The performance goals for the managers are combined with the “Risk Control Index” identified by the Risk Management Committee to ensure that risks under managers’ job responsibilities are manageable and preventable. The actual performance results are used to determine the evaluation rating, which is linked to relevant policies of human resources and compensation. The important decisions of the management level are all made after considering various risk factors, and the performance derived from these decisions is reflected in the Company’s profitability. As a result, the remuneration of the management level is associated with its risk control performance.