Linking Executive Compensation with ESG performance
Execution Status of Short-Term Performance Goals for 2023-2024: • The 2024 performance goals for CEO Kenneth Lu and Director Sophia Lien of the Governance and Sustainability Development Office include sustainability performance indicators. These are tied to variable compensation to be distributed in 2025, encompassing year-end bonuses and employee compensation.
• On March 13, 2024, the Board of Directors approved the total amount of employee compensation for 2023. The combined employee compensation for the aforementioned senior managers and the head of the Finance and Accounting Department increased by approximately 27% compared to the previous year. (Note: The head of the Finance and Accounting Department assumed office in August 2022.)
• Expand the implementation of linking compensation to sustainability performance to include department-level supervisors.
Short-Term Performance Goals for the General Manager| Indicator | Weighting | Description |
|---|---|---|
| Financial Indicators | 60% | Financial performance of company revenue and profit, budget target achievement rate. Focused on shareholder value, emphasizing financial indicators and strategies that enhance shareholder returns, company market value, and long-term competitiveness. |
| Strategic Indicators | 20% | Operational performance based on medium- and long-term strategies, including store expansion plans, store renovation, service capacity enhancement, and major investment policies. Short-term focus on profitability and efficiency; medium- to long-term emphasis on growth, market position, and resource allocation, creating sustainable competitive advantages to maximize value for shareholders and stakeholders. |
| Sustainability Indicators | 20% | Committed to implementing sustainability commitments, supervising key ESG tasks, including climate risk monitoring, greenhouse gas inventory, energy saving, and carbon reduction; talent development, occupational health and safety promotion, continuous public service, and community engagement; integrity management, legal compliance, information security, and risk management. |
| Indicator | Weighting | Description |
|---|---|---|
| Management of Sustainability Information | 50% | 1. Disclosure of sustainability information in the 2023 annual report: Submit by the end of March 2024 Appendix 2-2: Corporate governance practices Appendix 2-2-2: Implementation of sustainability development Appendix 2-2-3: Climate-related information Appendix 2-2-4: Integrity management 2. Preparation of the 2023 Sustainability Report: Pass Board review by the end of August 2024, publish on the company website and market observation post system. 3. Internal control of sustainability information management: Pass Board review by the end of December 2024 ◆ Sustainability report preparation and assurance procedures ◆ Sustainability information management practices |
| Corporate Governance and Sustainability Development | 40% | Four dimensions: Protect shareholder rights and equal treatment, strengthen board structure and operations, enhance information transparency, and promote sustainable development. Evaluation Criteria: (1) 10th Corporate Governance Evaluation 1. Score: 100 or above. 2. Ranking: Top 5% among OTC companies. (2) MSCI ESG Ratings: Grade A or above. (3) TCSA Taiwan Corporate Sustainability Awards: Bronze or above for Sustainability Report. |
| Climate Risk and Greenhouse Gas Inventory | 10% | (1) Board quarterly control over greenhouse gas inventory schedule 1. Parent company quarterly schedule control. 2. Consolidated subsidiary quarterly schedule control. (2) Public disclosure on Market Observation Post System by the end of June each year 1. Greenhouse gas emissions and reductions 2. Corporate ESG information disclosure |