Huaneng Power International, Inc. released a comprehensive Remuneration Management System covering directors and senior managers, outlining a structured, performance-oriented pay framework and enhanced governance measures.

Key Features

1. Scope and Governance • Applies to all directors—including internal, external, and independent—and senior management positions such as president, vice presidents, chief accountant, board secretary, and general legal counsel. • The Remuneration and Appraisal Committee drafts pay plans and conducts performance evaluations; director compensation requires shareholder approval, while senior management packages are sanctioned by the board.

2. Pay Structure • Internal directors and senior managers receive four components: base annual salary, allowances and subsidies, performance-based annual salary, and term-based incentive income. • Performance-based remuneration must represent at least 50% of total base and performance pay and is subject to a three-year deferral. • Independent directors receive fixed allowances; external non-independent directors receive no pay from the company.

3. Incentive-Restraint Mechanisms • Deferral: Performance pay is distributed over three years to reinforce long-term alignment. • Clawback: Overpayments are recoverable if financial statements are restated or if individuals are implicated in misconduct, including financial fraud or misappropriation. • Suspension or reduction of unpaid incentives is permitted when breaches of duty or illegal activities cause company losses.

4. Total Payroll Controls • Compensation levels are benchmarked against market rates and tied directly to corporate and individual performance, ensuring consistency with the remuneration of ordinary employees. • Departing directors or executives receive prorated compensation based on actual tenure.

5. Transparency • Annual remuneration for all covered individuals will be disclosed in accordance with regulatory requirements.

The new system, effective upon shareholder approval, aligns executive compensation with strategic goals, market standards, and long-term value creation while reinforcing accountability through deferral and clawback measures.