Compensation Policy

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A. Directors

1.  In 2022, the total remuneration paid by the Company to Directors (excluding remuneration to those who serve as employees) was NT$57,414 thousand and accounted for 0.36% of the net profit after tax of the Company. The remuneration (excluding remuneration to those who serve as employees) paid by companies in the consolidated financial statements (including SinoPac Holdings) was NT$87,249 thousand and accounted for 0.55% of the net profit after tax of all companies.
2.  The Company's remuneration for Directors includes transportation and attendance allowances and remuneration.
  (1)   The payments for transportation and attendance allowances shall be processed in accordance with the "Payment Guidelines for Transportation and Attendance Allowances for Directors, Supervisors, and Consultants" adopted by the Board of Directors. If the independent directors of the Company concurrently act as the members of the Audit Committee, Remuneration Committee or Ethical Corporate Management Committee, attendance allowances will be paid in accordance with the respective committee charters, and no additional transportation allowance will be paid. The attendance allowances per attendance at the committee meetings shall be defined in the committee charters based on the independent directors' powers, risks, and time spent.
  (2)   Article 36 of the Company's "Articles of Incorporation" provides that "In the event the Company makes a profit during the fiscal year it shall set aside no less than 0.01% of the profits for employee remuneration. The remuneration for Directors shall be no higher than 1%. However, the Company's accumulated losses shall have been covered. This Company shall distribute director compensation in cash. Employees compensation may be distributed in cash or in the form of shares. Employees eligible for compensation include employees of the Company and subsidiaries who meet the criteria set forth by the board of directors. The distribution ratio of compensation of directors and the distribution form and ratio of employees' compensation shall be approved by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors. In addition, a report of such distribution shall be submitted to the shareholders' meeting. When calculating employee and director remuneration, the profits of the current year (profits before tax deducted by pre-tax interest for distribution of remuneration to employees and directors) shall be deducted by accumulated deficit before calculating employee and director remuneration. The Articles of Incorporation have established the distribution standards and procedures for director remuneration and they link director remuneration to the Company's profitability and performance. The rate and amount of directors' remuneration for the current year would be based on the performance of directors, the financial and operational performance of the company, the implementation of corporate governance and ESG, and the reasonableness of the correlation of future risks, considering the industry standard with the peers,. and should be considered and approved by the Compensation Committee and the Board of Directors and reported to the shareholders' meeting.
  (3)   The remuneration for the Chairman of the Board shall be determined by the Remuneration Committee and the Board of Directors in accordance with prevailing rates of the industry.
  (4)   Director remuneration of the Company shall be distributed in accordance with prevailing rates of the industry based on individual participation and contribution to the Company's operations, the Company's overall operations and forecast, and risk factors that have already occurred.
  (5)   The "Regulations Governing the Evaluation of the Performance of the Board of Directors" were established by the Company on June 22, 2018 to evaluate the performance of the Board of Directors every year. The results of individual Directors' performance evaluation will be used as the basis for determining their individual remuneration.
  (6)  According to Article 5 of SinoPac Holdings' Rules Governing the Scope of Powers of Independent Directors, "The remuneration, compensation and service fees of the independent directors of the Company shall be collected in accordance with Articles 28-1 and 36 of the Company's Articles of Incorporation and the "Payment Guidelines for Transportation and Attendance Allowances for Directors, Supervisors, and Consultants," and may be different from those paid to regular directors as appropriate." As independent directors have more powers, risks and time spent than regular directors, independent directors shall be entitled to reasonable annual remunerations, in addition to attendance allowances for functional committee meetings, in the case of low profitability. In addition to supervising and giving independent opinions, independent directors are expected to provide strategic guidance and improve business performance together with other Board members. In case of high profitability, independent directors' remuneration link to their performance as regular directors. Over the past two years, SinoPac Holdings posted high profitability and did not define separate standards for independent directors' remunerations. Independent directors received the same remunerations as regular directors.


B. President & Executive Vice Presidents

 

The remuneration of the President and Executive Vice Presidents of SinoPac Holdings is commensurate with their respective professional standing and reference to industry standard and subject to the Company's Remuneration Committee and the final approval of the Board. In addition to the monthly fixed basic salary and allowances, according to Article 36 of the company's "Articles of Incorporation", "In the event the Company makes a profit during the fiscal year it shall set aside no less than 0.01% of the profits for employee remuneration. The remuneration for Directors shall be no higher than 1%. However, the Company's accumulated losses shall have been covered. "; and take into consideration factors such as the overall annual operating results, individual performance, and future risks. The results of performance evaluation conducted by the Company in accordance with the "Employee Appraisal Standards”. According to the
"Regulations Governing Long-term Incentives," the Company shall calculate remuneration for managers after considering
Non-financial performance indicators, as like ethical risk events or other risk events that have a negative impact on the corporate image and reputation or involve internal mismanagement or personnel malpractice and distribute it in proportion to Financial performance indicators, as like the target achievement rate, profitability, operational efficiency, and managers' contributions. Whenever necessary, the Company shall review the managers' remuneration system according to the business operations and laws and regulations. Remuneration under this structure aligns management reward and the company performance and reinforces the benefits of the investors.

In 2022, the remuneration to the President and Executive Vice Presidents of SinoPac Holdings totaled NT$70,807 thousand and accounted for 0.44% of its corporate earnings. The remunerations to the Presidents and Executive Vice Presidents of the companies included in the consolidated financial statements of SinoPac Holdings totaled NT$209,497 thousand and accounted for 1.31% of its corporate earnings. In 2021, the remuneration to the President and Executive Vice Presidents of SinoPac Holdings totaled NT$73,824 thousand and accounted for 0.46% of its corporate earnings. The remunerations to the Presidents and Executive Vice Presidents of the companies included in the consolidated financial statements of SinoPac Holdings totaled NT$213,471 thousand and accounted for 1.32% of its corporate earnings.