Shanghai FourSemi Semiconductor Co., Ltd. (FourSemi) released the “Terms of Reference of the Remuneration and Appraisal Committee of the Board of Directors,” laying out a comprehensive governance framework that will take effect upon the listing of its H shares on the Stock Exchange of Hong Kong (SEHK).

Key highlights include:

1. Committee Structure • Minimum of three directors, with independent non-executive directors (INEDs) forming the majority. • An INED will serve as committee chair. • Tenure aligns with the board’s term, and vacancies must be filled promptly to maintain required independence.

2. Core Responsibilities • Formulate overall remuneration policy, evaluation standards, and annual bonus schemes for directors and senior management. • Review and approve management pay proposals, equity incentive plans, and director service contracts that exceed three years or require more than one year’s notice for termination. • Ensure no director or associate participates in decisions regarding their own compensation. • Monitor implementation of remuneration systems and supervise performance appraisals.

3. Procedural Safeguards • At least one meeting per year; extraordinary meetings may be called by the chair, a majority of members, or the board chair. • Quorum set at two-thirds of members, including at least one INED; resolutions require majority approval. • The human resources department supplies performance data and prepares meeting materials, while the committee may seek independent professional advice at the company’s expense.

4. Transparency & Reporting • Meeting minutes must be signed, archived, and made available to committee members. • The committee’s terms of reference will be posted on both the SEHK and company websites. • The chair (or another INED) is required to attend the annual general meeting to address shareholder queries.

5. Shareholder Protection Measures • The board may veto any remuneration plan deemed detrimental to shareholder interests. • Director service contracts that trigger shareholder approval thresholds under SEHK Listing Rule 13.68 will be evaluated for fairness and reasonableness before recommendation to shareholders.

These governance provisions position FourSemi to align with Hong Kong Listing Rules, enhance remuneration transparency, and strengthen oversight as the company prepares for its SEHK debut.