Beijing Jingcheng Machinery Electric Company Limited (Jingcheng Machinery Electric) has released its Remuneration Management Rules for Directors and Senior Management, aiming to align compensation with corporate performance, shareholder value, and long-term strategic goals.

The new framework applies to all current directors—including independent and non-independent members—and senior management such as the general manager, deputy managers, chief financial officer, chief engineer, board secretary and chief legal advisor.

Key principles center on openness, fairness, and a direct linkage between pay, individual performance and corporate results. The policy stipulates that: • Performance-based remuneration must constitute no less than 50% of the combined basic salary and performance component for both non-independent directors who hold executive roles and for senior managers. • Independent directors will receive fixed allowances only and are excluded from internal performance-linked assessments. • Non-independent directors without management posts will generally receive no remuneration from the company.

Governance is vested in the Board’s Remuneration and Monitoring Committee, which will set assessment standards, review compensation plans, and recommend remuneration packages. Director pay requires shareholder approval, while senior management packages need board endorsement and explanation to shareholders. Any dissenting opinions within the board must be disclosed.

Enhanced transparency measures mandate annual disclosure of each director’s and senior manager’s pre-tax remuneration—including salaries, bonuses, allowances, subsidies, welfare benefits, insurance contributions and incentives—in the company’s annual report, alongside performance metrics, deferral arrangements and any clawbacks.

The policy introduces explicit clawback provisions: • If financial statements are restated due to fraud or material misstatement, overpaid performance and long-term incentive income will be recovered. • For misconduct causing corporate losses—such as financial fraud, fund misappropriation or unlawful guarantees—the company may suspend unpaid variable pay and reclaim rewards already distributed.

Remuneration adjustments will consider industry pay trends, inflation, corporate profitability, strategic changes and individual role shifts. Any modifications for directors require shareholder approval; changes for senior management need board consent.

The rules take effect following shareholder approval at the June 2026 general meeting, with the board responsible for future interpretations and amendments.