Huaqin Defines Remuneration and Appraisal Committee Framework to Strengthen Governance

Huaqin has released detailed Terms of Reference for its newly established Remuneration and Appraisal Committee, aiming to refine compensation governance for directors and senior management and enhance overall board oversight.

The committee will comprise three directors, with no fewer than two serving as independent directors. An independent director will act as chairperson, and members will serve coterminous with the board’s tenure. Vacancies arising from director departures will be filled following the same nomination and election processes, ensuring continuity of oversight.

Key responsibilities include: • Formulating and reviewing remuneration policies for directors and senior management. • Setting evaluation criteria and conducting performance appraisals. • Recommending remuneration packages, loss-of-office compensation, and dismissal arrangements, with a requirement that affected directors and their associates abstain from related decisions. • Overseeing equity incentive plans, employee share-holding schemes, and share-scheme matters under Chapter 17 of the Hong Kong Listing Rules. • Designing share-ownership schemes for directors and senior executives of subsidiaries targeted for potential spin-offs.

The board retains veto rights over any remuneration plan deemed detrimental to shareholder interests and must disclose reasons for overriding committee recommendations. Approved director remuneration proposals will require shareholder approval, while senior management packages will be finalized at board level.

Operationally, the committee must meet at least twice annually, with a quorum of two-thirds of members. Resolutions pass with a simple majority vote. Members are required to recuse themselves from discussions involving their own remuneration, and strict confidentiality rules apply. Meeting minutes will be archived by the board office.

These rules take effect upon Huaqin’s H-share listing on the Stock Exchange of Hong Kong. Any future conflicts with national laws, listing regulations, or the company’s Articles of Association will trigger immediate amendments, subject to board approval.