Performance Evaluation and Remuneration

Performance Evaluation of the Board and Functional Committees

 

(1)Internal Performance Evaluation 

Self-evaluation 

Evaluation cycle

Evaluation period

Scope of evaluation

Method of

evaluation

Evaluation contents

Evaluation contents

2022.10~

2023.09

Board of Directors

Board of Directors’ self-evaluation and executed by the deliberative unit.

  
  • The level of participation in the company's operation/Directors' sense of duty and level of participation in the company's operation.
  • Enhancing the quality of board decision-making/grasp of the company's goals and tasks as well as the management and communication of internal relations.
  • Composition and Structure of the Board of Directors.
  • Appointment of Directors and Continuing Education.
  • Internal Control.
 

Evaluation contents

2022.10~

2023.09

Individual Directors

Individual Directors’ self-evaluation and executed by the deliberative unit.

Once a year

2022.10~

2023.09

Audit Committee

Members’ self-evaluation and executed by the deliberative unit.

  
  • Degree of involvement in the company's operations
  • Understanding of the responsibilities of functional committees.
  • Improving the decision-making quality of functional committees.
  • Composition and appointment of functional committee members.
  • Internal control.

Once a year

2022.10~

2023.09

Remuneration Committee

Independent Directors’ self-evaluation and executed by the deliberative unit.

  
  • Degree of involvement in the company's operations.
  • Understanding of the responsibilities of functional committees.
  • Improving the decision-making quality of functional committees.
  • Composition and appointment of functional committee members.
 

Once a year

2022.10~

2023.09

Corporate Governance and Nomination Committee

Independent Directors’ self-evaluation and executed by the deliberative unit.

 

The Company's Board of Directors has approved the "Methods to Evaluate Performance of the Board of Directors" on October 29, 2017. The Company executes the performance evaluation once a year. The members of the Board of Directors and functional committees and the responsible departments for Board of Directors meetings has processed internal performance evaluation on the “Board of Directors”, ”Director members”, “Audit Committee”, “Remuneration Committee” and “Corporate Governance and Nomination Committee”. The assessment results will be classified into three levels: Exceeding Expectations, Meets Expectations, and Room for Improvement.

 

In 2023, the self-evaluation results of the “Board of Directors”, “Audit Committee”, “Remuneration Committee” and “Corporate Governance and Nomination Committee” were rated as "Exceeding Expectations" and no material improvement items were found. The evaluation results will submit to the Board of Directors in the first Board meeting in 2024 and will be as a reference for members of the Board of Directors and functional committees on their performance, compensation and nomination renewal.

 

 

(2)External performance evaluation

External Evaluation

Evaluation cycle

Evaluation period

Scope of evaluation

Method of

evaluation

Evaluation contents

Once every 3 years

2020.09~

2021.08

Board of Directors

Evaluation was conducted by online self-assessment questionnaire and field visit.

Taiwan Corporate Governance Association was entrusted to evaluate the effectiveness of the external board of directors in eight aspects, including composition, guidance, authorization, supervision, communication, internal control and risk management, self-discipline and support system through online self-assessment questionnaire and field visit.

 

 

The performance evaluation of the Company's Board of Directors is conducted at least once every 3 years by an external professional independent agency or an external expert academic team. In 2021, the Company has commissioned Taiwan Corporate Governance Association to carry out an external assessment of the Board’s efficacy, especially with regard to eight aspects of the Board: composition, leadership, authority, supervision, communication, internal control and risk management, self-discipline and supportive systems. The assessment is carried out through an online questionnaire and site visits. The Company submitted the evaluation results to the board of directors on February 10, 2022. The next external evaluation is expected to be arranged in the fourth quarter of 2024, and will be reported to the board of directors in the first quarter of 2025.

 

Reasons why external agencies and evaluation committees are independent:

The "Taiwan Corporate Governance Association (TCGA)" has no business dealings with the company and is independent. It is neither a related person of the company nor has business relations that affect its independence. Participants and their relatives within the second degree of kinship do not hold positions that significantly influence the company, nor do they have direct or indirect financial interest relationships or bribery with the company.

 

The evaluation report issued by the " Taiwan Corporate Governance Association (TCGA)" shows：

5 of the Company's 9 directors are independent , accounting for more than half of the total board of directors, and more than one-fifth of board of directors is female. All of them are professionals and with rich management experiences. Through the semi-annual strategy meeting, independent directors are invited to discuss the environment and major issues faced by the Company on the Company's "biaxial transformation" strategy, and to form a consensus on major development goals and strategies. The board of directors based on the recommendations of the TCGA as a reference for continuing to improve the functions of the board of directors, Including amendments to the Whistleblowing policy and channel, showing that the company attaches importance to the effectiveness (including trustworthiness) of the reporting system.

 

Please click here to view the external conclusion assessment statement from the Taiwan Corporate Governance Association.

 

 

 

Director’s and Manager’s Remuneration

(1)Director's remuneration

The remuneration of the directors of the Company shall be paid by the Board of Directors in accordance with the provisions of the Regulations Governing the Remuneration of Directors and Members of Functional Committees, which are formulated in accordance with the authorization of the Articles of Incorporation, based on the participation and value of contribution by the directors to the operation of the Company, and with reference to the standards of domestic and foreign industry.

 

The remuneration of the directors shall be increased in accordance with the chairman, convener and members of the functional committees, and may be reduced at their discretion in accordance with the results of operational performance or performance evaluation by the directors.

 

According to the Articles of Incorporation, if the company makes profit for the year, no less than 5% should be set aside as employee remuneration. However, when the company still has accumulated losses, provision should be made in advance for the deficit.

 

Starting from 2024, the director’s remuneration will be reported annually to the shareholders’ meeting including of remuneration policy, personal remuneration and amount.

 

(2)Manager's remuneration

 

Manager's remuneration policy

The remuneration of the managers of the Company shall be paid in accordance with the principle of "Remuneration Policy of Managers" determined by the Remuneration Committee and the Board of Directors, and shall be reviewed by the Remuneration Committee on an annual basis and submitted to the Board of Directors for resolution. The Company has also cooperated with external professional consultants for a long time to ensure that managers' remuneration policies, payment levels and market fluctuations are linked. The remuneration of our company's manager is linked to the company's operational performance. The overall reward composition consists of salary, short and long-term variable bonuses, and profit-sharing employee bonuses. Among these, variable bonuses are determined based on operational performance, accounting for 70% to 90% of the total remuneration depending on position and performance. At the same time, the managers' long-term reward plan is assessed over a three-year period, with stock rewards accounting for more than 50%, and includes clawback provisions. The Remuneration Committee sets performance goals in line with the company's long-term development strategy. In addition to financial indicators such as EBITDA, revenue, gross profit margin, and operating profit margin of strategic products, and contribution to shareholders, it also incorporates ESG sustainability performance and major theme management goals, combining the three major axes of "environmental sustainability", "inclusive growth", and "agile innovation". centered around “environmental sustainability”, “inclusive growth”, and “flexible innovation”, deepening the connection with shareholder interests and fulfilling our commitment to sustainable management.

 

Executive Stock Ownership Guidelines

Part of the manager's remuneration is paid in the form of stock, and the Board of Directors had formulated the "Executive Stock Ownership Guidelines" on 23. Feb, 2023, after reviewed and revised on March 11, 2024, which requires executives to own company shares in an amount equal to a multiple of their annual base salary: ten multiples for the chairman, CEO, and president; and five multiples for other executives. The executives are required to achieve the shareholding target within five years of appointment or from the policy effective date, and maintain the value of the above shareholding during the term of the executive, so as to strengthen corporate governance and reduce management risks.