Legend Holdings Corporation released an updated Terms of Reference for its Board Remuneration Committee, formalising the committee’s structure, authority and operating procedures in line with the Company Law of the PRC and Hong Kong Listing Rules.
Key Points
1. Purpose and Scope • The committee is tasked with formulating remuneration strategy, performance appraisal mechanisms and incentive policies for directors, senior management and core management, with all proposals requiring Board approval and, where applicable, shareholder consent. • Senior management is defined as per the company’s Articles of Association.
2. Composition and Independence • The committee must comprise at least three directors, with a majority—and the chair—being independent non-executive directors, ensuring external oversight of pay decisions. • Members must disclose any personal financial interests or potential conflicts and abstain from relevant votes.
3. Principal Responsibilities • Recommend overall pay structure, including share incentive plans, to the Board. • Review performance of executive directors and senior management, set individual remuneration packages, and approve compensation for loss or termination of office. • Advise on directors’ service contracts that exceed three-year terms or involve notice periods or severance exceeding one year, as required under Hong Kong Listing Rule 13.68. • Oversee compliance for any share-based incentive schemes under Chapter 17 of the Hong Kong Listing Rules. • Approve all public disclosures relating to remuneration matters.
4. Procedural Rules • At least one scheduled meeting is required annually, with a minimum three-business-day notice period; extraordinary meetings can be convened on the same notice terms. • A quorum is two members, including at least one independent non-executive director. • Decisions require a simple majority; abstention is prohibited. • Detailed minutes must be kept and made available to any director on reasonable notice.
5. Reporting and Transparency • The committee must report its work and recommendations to the Board and notify the supervisory committee unless restricted by law. • The chair (or a designated member) will attend the annual general meeting to address shareholder questions on remuneration governance.
6. Administrative Support and External Advice • Senior management must provide timely, complete information, and the committee may seek independent professional advice at the company’s expense.
The updated mandate strengthens Legend Holdings’ governance framework by clarifying the remuneration committee’s authority, enhancing transparency, and aligning practices with regulatory standards in both mainland China and Hong Kong.
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