SICC released its “Remuneration Management System of Directors and Senior Management Members,” detailing a revamped pay framework that links compensation closely with company performance, governance standards and long-term strategic objectives.

Key Features of the New System

1. Governance and Oversight • The Remuneration and Assessment Committee of the Board will design remuneration policies, performance criteria and appraisal processes. • Independent third-party evaluators may be engaged for performance reviews. • All director pay packages require shareholder approval; senior management packages are approved by the Board and disclosed to shareholders. • Any director subject to assessment or remuneration decisions must abstain from voting.

2. Pay Structure and Ratios • Compensation is composed of basic salary, performance-based remuneration and medium-to-long-term incentives (e.g., equity incentives or employee share ownership plans). • Performance-based remuneration must represent at least 50% of total fixed and variable cash pay. • Independent directors receive a fixed allowance only; non-independent directors are paid according to any concurrent management roles, with no separate director fees when holding such posts.

3. Performance Linkage • Annual performance targets derive from the Board-approved business strategy. • A designated appraisal team evaluates results using audited financial data; incentive bonuses are paid after annual report disclosure. • If the company swings to a loss or losses widen without a corresponding drop in variable pay, detailed explanations must be disclosed.

4. Flexibility and Adjustments • Remuneration levels can be revised to reflect industry salary trends, inflation, strategic pivots, organisational changes or individual role adjustments. • Special rewards or penalties may be instituted with Board or shareholder approval.

5. Clawback and Suspension Mechanisms • The company can suspend or reclaim unpaid or previously disbursed performance pay and long-term incentives in cases of: – Serious violation of company rules, significant impairment of corporate interests or regulatory sanctions; – Audit opinions that are qualified, adverse or disclaimers; – Financial restatements stemming from misstatements or fraud. • Directors or executives found breaching fiduciary duties or involved in illegal acts such as fund misappropriation face full or partial pay clawbacks.

6. Budget Discipline • An annual remuneration budget will align with strategic objectives and market forecasts. Pay-outs can be curtailed if company-wide performance underperforms expectations.

Implementation Timeline The system takes effect upon approval by SICC’s shareholders’ meeting; any future amendments will follow the same approval process.

Strategic Implications By instituting a higher variable-pay threshold, strict performance appraisals and explicit clawback provisions, SICC aims to reinforce alignment between executive incentives and long-term shareholder value while ensuring compliance with Chinese corporate governance regulations.