Board of Directors and Executive Management

Transcription

1 Board of s and Executive Management Board of s The board of directors, acting on behalf of the Company s shareholders, is charged with the task of supervising the management team. The board, elected and approved during the AGM on June 15, 2011, includes four independent directors, which more than fulfill current regulations requiring public companies to have at least two independent directors. The Audit Committee, composed entirely of independent directors, replaced board supervisors. Information on the Company s Sixth Board of s is detailed below: Title Chairman Chairman Name Fu-Chi Venture Corp. Representative: Richard Tsai Fu-Chi Venture Corp. Representative: Daniel Tsai TCC Investment Representative: Cliff Lai Date elected Term expires ,387, ,387, ,774, As of March 15, 2013 Shareholding when Spouse/minor s Officer or director is a spouse Current shareholding elected shareholdings Education and experience Current position(s) in the Company and other companies or consanguineous within two degrees Shares % Shares % Shares % Title Name Relationship 5,748,763 *90,127,938 5,748,763 *91,979, ,496,761 *2, * * * ,986, ,580, , MBA, Stern School, New York University Chairman, Fubon Securities Chairman, Fubon Life Insurance Co, LL.B., National Taiwan University Chairman, Fubon Financial Holding Chairman, Taipei Fubon Commercial Bank Chairman, Taiwan Fixed Network LL.M., Georgetown University Chairman, Fubon Financial Holding Chairman, Fubon Insurance Chairman, Taipei Fubon Commercial Bank Chairman, Fubon Land Development Co., EMBA, National Chengchi University MS in Electrical Engineering, North Carolina State University, USA Researcher, AT&T Laboratories President, Tecom President, Mobitai Communications President, Reach and Range Inc. Senior President, Taiwan Fixed Network CEO, Fu Yang Media Technology Senior President and Chief Business Officer, Taiwan Mobile Senior President and Chief Operating Officer of the Consumer Business, Taiwan Mobile Co-President, Taiwan Mobile, Taipei New Horizon, Taiwan Cellular and President, Taiwan Fixed Network, Wealth Media Technology and President, TFN Media Chairman, Win TV Broadcasting Chairman, Globalview Cable TV Chairman, Union Cable TV Chairman, Yeong Jia Leh Cable TV Chairman, Phoenix Cable TV Chairman, Taiwan Kuro Times Chairman, Taiwan Teleservices & Technologies Chairman and President, Taiwan Super Basketball Chairman and President, TWM Communications (Beijing) Co.,, Xiamen Taifu Teleservices & Technologies, Fubon Multimedia Technology, Taiwan Internet Association, Taiwan Network Information Center Chairman Daniel Tsai Brother Chairman Richard Tsai Brother 12

2 Title Independent Independent TCC Name Investment Representative: Vivien Hsu Fu-Chi Corp. Venture Representative: Victor Kung Date elected Term expires ,774, ,387, Shareholding when Spouse/minor s Officer or director is a spouse Current shareholding elected shareholdings Education and experience Current position(s) in the Company and other companies or consanguineous within two degrees Shares % Shares % Shares % Title Name Relationship 200,496,761 *None 5,748,763 *None *None *None Jack J.T. Huang Tsung-Ming Chung MBA, University of New South Wales, Sydney, Australia MBA, National Chengchi University Executive President and Chief Financial Officer, KG Telecom President and CEO, Lambda Net President and CEO, KGEx.com President and CEO, KG Satellite Communication Chief Financial Officer, Cathay Financial Holding Co., Ltd Senior President and Chief of Staff, Taiwan Mobile Chairman, Taiwan Tele-Shop Senior Consultant & Acting President, Taiwan Fixed Network Chairman, Win TV Broadcasting Senior President and Chief Financial Officer, Taiwan Mobile MA in Economics and MBA in Finance, New York University Executive President, Walden International Investment Executive, Citicorp Capital Asia of Direct Investments, AIG Investment Corp. LL.B., National Taiwan University LL.M., Northwestern University S.J.D., Harvard University BBA, National Taiwan University MBA, National Chengchi University CPA, ROC CPA, Connecticut, USA Partner, T.N. Soong & Co., CPAs Lecturer, Department of Accounting, National Chengchi University Lecturer, Department of Accounting, National Taiwan University Co-President, Taiwan Mobile and President, Taipei New Horizon and President, Taiwan Cellular and President, Wealth Media Technology, Globalview Cable TV, Union Cable TV, Yeong Jia Leh Cable TV, Phoenix Cable TV, Taiwan Teleservices & Technologies, TWM Communications (Beijing) and President, TCC Investment, Xiamen Taifu Teleservices & Technologies Supervisor, Taiwan Fixed Network Supervisor, TFN Media Supervisor, Win TV Broadcasting Supervisor, Taiwan Kuro Times Supervisor, Fubon Multimedia Technology and President, Fubon Financial Holding, Fubon Insurance, Taipei Fubon Commercial Bank, Fubon Asset Management, Fubon Bank (HK) Supervisor, Fubon Financial Holding Venture Capital Chairman, World Vision Taiwan, Commerce Development Research Institute, China Evangelical Seminary, Taiwan After-Care Association Partner-in-charge, Jones Day Taipei Independent, World Peace Holding Independent, Systex Corp., Yulon Motor, Yue Yuen Development, Yu Shin Investment Corp., Jing Yu Investment Corp., Sun Shining Investment Corp. Supervisor, Tai Yuen Venture Capital Investment Corp. Chairman, Dynapack Technology Corp. Independent, Chroma ATE Inc., Far Eastern International Commercial Bank, Unity Opto Technology Supervisor, Chien Kuo Construction 13

3 Title Independent Independent Name Wen-Li Yeh J. Carl Hsu Date elected Term expires Shareholding when Spouse/minor s Officer or director is a spouse Current shareholding elected shareholdings Education and experience Current position(s) in the Company and other companies or consanguineous within two degrees Shares % Shares % Shares % Title Name Relationship Department of Architecture, Chung Yuan Christian University MA and Ph.D. candidate, University of Paris EMBA studies, University of California, Berkeley Planner, Department of Housing and Urban Development under the Cabinet s Council for Economic Planning and Development Managing, United Pacific International Inc. President, United Communications Managing and Chairman, United Advertisi nng Chairman, Carat-United Media Services (Taiwan) Chairman, Aegis Media Taiwan BSEE, National Taiwan University Ph.D. and MS in Computer Science, University of California, Los Angeles Senior Executive, AT&T, Bell Labs and Lucent Technologies Communications Software Professor, National Tsing Hua University in Taiwan, Peking University and others Chairman, Aegis Media Greater China Supervisor, Cheng Sheng Broadcasting Corp. Professor, Peking University and other universities Board member of Rogers Corp., USA * Personal shareholding 14

4 1. Major shareholders of TWM s institutional investors As of March 15, 2013 Institutional investor Major shareholders Fu-Chi Venture Corp. Richard Tsai (50.20%), Mei-Hui Ueng Tsai (49.75%), Cheng Ru Tsai (0.05%) TCC Investment Taiwan Cellular (100%) 2. Major shareholders of companies mentioned on the right hand side of the table above As of March 15, 2013 Company Major shareholders Taiwan Cellular Taiwan Mobile (100%) 3. Qualifications and independence of directors Name Over five years of experience in business, finance, legal and/or other areas related to the Company s business Independence criteria (Notes) As of March 15, 2013 No. of public companies in which he or she also serves as an independent director Richard Tsai V V V V 0 Daniel Tsai V V V V 0 Cliff Lai V V V V V V V V 0 Vivien Hsu V V V V V V V 0 Victor Kung V V V V V V V V 0 Jack J.T. Huang V V V V V V V V V V V 2 Tsung-Ming Chung V V V V V V V V V V V 1 Wen-Li Yeh V V V V V V V V V V V 0 J. Carl Hsu V V V V V V V V V V V 0 V denotes meeting the conditions specified above Criterion 1: Not an employee of the Company or its affiliated companies Criterion 2: Not a director or supervisor of the Company s affiliated companies (Unless the person is an independent director of the Company, the Company s parent company or any subsidiary in which the Company holds, directly or indirectly, more than 50 percent of the voting shares) Criterion 3: Not a shareholder whose total holdings, including that of his/her spouse and minor children, or shares held under others names reach or exceed 1 percent of the total outstanding shares of the Company or rank among the top 10 individual shareholders Criterion 4: Not a spouse or a relative within second degree by affinity, or within five degrees by consanguinity to any person specified in criteria 1 to 3 Criterion 5: Neither a director, supervisor, or employee of an entity that directly and/or indirectly holds more than 5% of the Company s shares, nor one of the Company s top five shareholders Criterion 6: Not a director, supervisor, manager, or shareholder owning more than 5% of the outstanding shares of any company that has financial or business relations with the Company Criterion 7: Not an owner, partner, director, supervisor, manager, or spouse of any of the aforementioned, of any sole proprietorship, partnership, company, or institution that provides commercial, legal, financial and accounting services or consultation to the Company or its affiliates. However, members of the Compensation Committee are not covered by this restriction per Article 7 of the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter Criterion 8: Not a spouse or relative within second degree by affinity to other directors Criterion 9: Not in contravention of Article 30 of the Company Act Criterion 10: Not an institutional shareholder or its representative pursuant to Article 27 of the Company Act 15

5 Management Team As of March 15, 2013 Title / Division Name Effective date Shareholding / % Spouse/ minor s shareholding / % Education and experience Current position(s) in other companies Manager or director is a spouse or consanguineous within two degrees Title Name Relationship, Taipei New Horizon, Taiwan Cellular and President, Taiwan Fixed Network Co-President / President s Office Cliff Lai ,349/ ,000/0.000 EMBA, National Chengchi University MS in Electrical Engineering, North Carolina State University, USA Researcher, AT&T Laboratories President, Tecom President, Mobitai Communications President, Reach and Range Inc. Senior President, Taiwan Fixed Network CEO, Fu Yang Media Technology Senior President and Chief Business Officer, Taiwan Mobile Senior President and Chief Operating Officer of the Consumer Business, Taiwan Mobile, Wealth Media Technology and President, TFN Media Chairman, Win TV Broadcasting Chairman, Globalview Cable TV Chairman, Union Cable TV Chairman, Yeong Jia Leh Cable TV Chairman, Phoenix Cable TV Chairman, Taiwan Kuro Times Chairman, Taiwan Teleservices & Technologies Chairman and President, Taiwan Super Basketball Chairman and President, TWM Communications (Beijing), Xiamen Taifu Teleservices & Technologies, Fubon Multimedia Technology, Taiwan Internet Association, Taiwan Network Information Center 16

6 Title / Division Name Effective date Shareholding / % Spouse/ minor s shareholding / % Education and experience Current position(s) in other companies Manager or director is a spouse or consanguineous within two degrees Title Name Relationship and President, Taipei New Horizon Co., Co-President / President s Office Vivien Hsu MBA, University of New South Wales, Sydney, Australia MBA, National Chengchi University Executive President and Chief Financial Officer, KG Telecom President and CEO, Lambda Net President and CEO, KGEx.com President and CEO, KG Satellite Communication Chief Financial Officer, Cathay Financial Holding Co., Ltd Senior President and Chief of Staff, Taiwan Mobile Chairman, Taiwan Tele-Shop Senior Consultant & Acting President, Taiwan Fixed Network Chairman, Win TV Broadcasting Senior President and Chief Financial Officer, Taiwan Mobile and President, Taiwan Cellular and President, Wealth Media Technology, Globalview Cable TV, Union Cable TV, Yeong Jia Leh Cable TV, Phoenix Cable TV, Taiwan Teleservices & Technologies, TWM Communications (Beijing) Co., and President, TCC Investment, Xiamen Taifu Teleservices & Technologies Supervisor, Taiwan Fixed Network Supervisor, TFN Media Supervisor, Win TV Broadcasting Supervisor, Taiwan Kuro Times Supervisor, Fubon Multimedia Technology Co., Supervisor, Taipei New Horizon EMBA, National Taiwan University Supervisor, Wealth Media Technology LL.M., National Taipei University Supervisor, Globalview Cable TV Legal Office Ariel Hwang LL.B., National Taiwan University Judge, Taiwan Taoyuan District Court Judge, Taiwan New Taipei District Court Supervisor, Union Cable TV Supervisor, Yeong Jia Leh Cable TV Supervisor, Phoenix Cable TV Judge, Taiwan Taipei District Court Legal Consultant, Fubon Financial Holding Co., Judge, Taiwan High Court Legal Consultant, Taiwan Fixed Network 17

7 Title / Division Name Effective date Shareholding / % Spouse/ minor s shareholding / % Education and experience Current position(s) in other companies Manager or director is a spouse or consanguineous within two degrees Title Name Relationship EMBA, National Sun Yat-sen University Engineering Supervisor, Engineering Division, Nan Ya Plastics Corp., Procurement Division, TransAsia Procurement & Logistics Division and Administration Jay Hong ,000/0.000 Telecommunications Inc. President, Customer Service Division, TransAsia Telecommunications Inc. President, Direct Store Division, Taiwan Mobile Supervisor, Globalview Cable TV Supervisor, Union Cable TV Supervisor, Yeong Jia Leh Cable TV Supervisor, Phoenix Cable TV Division President, Taiwan Teleservices & Technologies President, President's Office, Taiwan Mobile MS in Computer Science, University of Illinois at Chicago Information James Chang ,084/0.005 District Manager, AT&T Laboratories Senior Delivery Manager, IBM Global Services Senior, TBCommerce Network None Corp., AT&T Laboratories 18

8 Title / Division Name Effective date Shareholding / % Spouse/ minor s shareholding / % Education and experience Current position(s) in other companies Manager or director is a spouse or consanguineous within two degrees Title Name Relationship Senior President and Chief Financial Officer / Finance Rosie Yu BA, National Taiwan University Executive President, China Securities General Manager, Citicorp International Securities, Taipei Branch General Manager, Credit Lyonnais Securities (Asia), Taipei Branch President, Global Investment Holdings Co., Chairman, Global Investment Advisory (HK), Globalview Cable TV, Union Cable TV, Yeong Jia Leh Cable TV, Phoenix Cable TV, Taiwan Kuro Times Supervisor, Taiwan Cellular Supervisor, Taiwan Teleservices & Technologies Supervisor, TWM Communications (Beijing) Co., Supervisor, TCC Investment Supervisor, Fubon Multimedia Technology Co., President and Acting Chief Technology Officer / Technology HS Wang / /0.000 Ph.D. in Electrical and Computer Engineering, Rutgers, State University of New Jersey Lecturer/Assistant Professor, Information Engineering Department, Chinese University of Hong Kong President, Mediatec Corp. President, First International Telecom, Taiwan Cellular, Wealth Media Technology, Globalview Cable TV, Union Cable TV, Yeong Jia Leh Cable TV, Phoenix Cable TV, Taiwan Teleservices & Technologies, Taiwan Super Basketball BS in Electrical Engineering, Tamkang University Technology Egon Chen ,158/0.002, Suretone Telecom Inc. Senior, Taiwan Fixed Network Co., None Ltd President, Howin Technologies 19

9 Title / Division Name Effective date Shareholding / % Spouse/ minor s shareholding / % Education and experience Current position(s) in other companies Manager or director is a spouse or consanguineous within two degrees Title Name Relationship EMBA, National Taiwan University Technology Chien Chen Manager, Siemens Telecommunication Systems, Suretone Telecom Inc. President, Taiwan Fixed Network Co., None President, Howin Technologies Corp. Ph.D. in Electrical and Computer Engineering, Johns Hopkins University Technology Tom Koh Member of Tech. Staff, Bellcore Senior Technologist, Motorola Senior Sales Engineer, Ensemble Communications Senior Technical Marketing Engineer, None Cisco-Linksys Senior, Qualcomm President and Deputy Chief Operating Officer / Consumer Business Jeff Ku ,243/0.000 EMBA, National Taiwan University MBA, University of Wollongong, Australia, Far EasTone Telecommunications President, Taiwan High Speed Rail Corp., Taiwan Kuro Times, TWM Communications (Beijing) Co., 20

10 Title / Division Name Effective date Shareholding / % Spouse/ minor s shareholding / % Education and experience Current position(s) in other companies Manager or director is a spouse or consanguineous within two degrees Title Name Relationship BS in Business Administration and Sociology, Fu Jen Catholic University University of Texas, Austin Account Supervisor, Bozell CCAA Consumer Business Sean Hsieh ,396/0.004 Account, Series DMB&B Communications Marketing and Sales Manager, PUMA North Asia, Taiwan Branch Marketing, TransAsia Telecommunications Inc. President, TransAsia Telecommunications Inc. None President, Enterprise Solution and Channel Sales, Taiwan Mobile MS in Computer Science, Bradley University, USA Supervisor, Siemens Telecommunication Systems Consumer Business Paul Huang ,338/0.006 Account and Project Manager, Nortel, Taiwan Branch President, Business Development, Hong Kong Telecom, Taiwan Branch President, Sales and Services, Far None EasTone Telecommunications President, Business and Operations, Far Eastern Electronic Toll Collection Co., 21

11 Title / Division Name Effective date Shareholding / % Spouse/ minor s shareholding / % Education and experience Current position(s) in other companies Manager or director is a spouse or consanguineous within two degrees Title Name Relationship MBA, Southern Methodist University, USA Assistant President, Credit Card, Citibank, N.A., Taiwan Consumer Business Steve Chou President, Customer Service, TransAsia Telecommunications Inc. President, Customer Service, Sparq Telecom General Manager, Secured Lending, and President, Taiwan Teleservices & Technologies Chairman, Xiamen Taifu Teleservices & Technologies Standard Chartered Bank, Taiwan Senior President, Customer Service, HSBC Bank Taiwan BS in Transportation Management, National Chiao Tung University Advisory Systems Engineer, Systems Engineer, IBM Taiwan Technical Manager, Central and South Branch, IBM Taiwan Solutions, Finance Industry, IBM Consumer Business Joseph Yang ,720/0.000 Taiwan Sales, Finance Industry, IBM Taiwan President for Sales, Eastern Broadband Telecom Chief Operating Officer, Eastern Broadband Telecom Senior President, Asia Pacific Telecom Chief Marketing Officer, Asia Pacific Telecom Product, Asia Region, High Tech Computer None

12 Compensation to directors and management executives 1. Compensation to directors Title Chairman Chairman Name s compensation Fu-Chi Venture Corp. Fu-Chi Venture Corp. TCC Investment TCC Investment Unit: NT$ Fu-Chi Venture Corp. Representative Richard Tsai Daniel Tsai Cliff Lai Vivien Hsu Victor Kung Cash compensation - - (A) - - Pension (B) Earnings paid as compensation to directors (C) 6,346,771 4,760,080 3,173,387 3,173,387 3,173,387 6,346,771 4,760,080 3,173,387 3,173,387 3,173,387 Professional fee (D) 150, , , , , , , , , ,000 A+B+C+D as a % of net profit % % % % % % % % % % Performance-based salary (E) Retirement pay of employees (F) Cash bonus Stock Employee profit sharing Earnings paid as bonus to employees (G) bonus Cash bonus Stock bonus Employee stock option granted (H) New restricted employee shares (I) A+B+C+D+E+F+G as a % of net profit Compensation from investees other than subsidiaries - - 9,000 9,000 - Other allowances 23

13 Title Name Representative Independent Independent Independent Independent Jack J.T. Huang Tsung-Ming Chung Wen-Li Yeh J. Carl Hsu Cash compensation (A) Pension (B) - - s Earnings paid as 4,760,080 4,760,080 4,760,080 4,760,080 39,667,332 compensation compensation to directors (C) 4,760,080 4,760,080 4,760,080 4,760,080 39,667,332 Professional fee (D) 210, , , ,000 1,540, , , , ,000 2,596,000 A+B+C+D as a % of net profit % % % % % % % % % % Performance-based 71,234,453 salary (E) 71,234,453 Retirement pay of 216,000 employees (F) 216,000 Cash 11,241,607 bonus Stock - Employee Earnings paid as bonus bonus profit sharing to employees (G) Cash 11,241,607 bonus Stock - bonus Employee stock option - granted (H) - New restricted - employee shares (I) - A+B+C+D+E+F+G as a % of net profit % % Compensation from investees other than subsidiaries - 18,000 Other allowances 1,793,673 1,793,673 Total Unit: NT$ 24

14 2. Range of compensation to directors Range of compensation to directors NT$0~NT$1,999,999 s compensation Name of directors s compensation + employee profit sharing On a stand-alone basis On a consolidated basis On a stand-alone basis On a consolidated basis Richard Tsai, Daniel Tsai, Victor Richard Tsai, Daniel Tsai, Victor Victor Kung Victor Kung Kung, Cliff Lai, Vivien Hsu Kung, Cliff Lai, Vivien Hsu NT$2,000,000~NT$4,999,999 Jack J.T.Huang, J. Carl Hsu Jack J.T.Huang, J. Carl Hsu Jack J.T.Huang, J. Carl Hsu Jack J.T.Huang, J. Carl Hsu NT$5,000,000~NT$9,999,999 Tsung-Ming Chung, Wen-Li Yeh, TCC Investment Tsung-Ming Chung, Wen-Li Yeh, TCC Investment Tsung-Ming Chung, Wen-Li Yeh, TCC Investment Tsung-Ming Chung, Wen-Li Yeh, TCC Investment NT$10,000,000~NT$14,999,999 Fu-Chi Venture Corp. Fu-Chi Venture Corp. Fu-Chi Venture Corp. Fu-Chi Venture Corp. NT$15,000,000~NT$29,999, Richard Tsai, Daniel Tsai, Cliff Lai, Vivien Hsu Richard Tsai, Daniel Tsai, Cliff Lai, Vivien Hsu NT$30,000,000~NT$49,999,999 - NT$50,000,000~NT$99,999,999 - NT$100,000,000 and above - Total

15 3. Compensation to management executives Title and name Salary (A) Pension (B) (Note 1) Performance-based salary (C) Employee profit sharing (D) A+B+C+D as a % of net profit Employee stock options Co-President, Cliff Lai; Co-President, Vivien Hsu; Chief Financial Officer, Rosie Yu; Acting Chief Technology Officer, H.S. Wang; President, Ariel Hwang; President, Jay Hong; President, James Chang; President, Egon Chen; President, Chien Chen; President, Tom Koh; Deputy Chief Operating Officer of the Consumer Business, Jeff Ku; President, Sean Hsieh; President, Paul Huang; President, Steve Chou; President, Joseph Yang Resigned managers: President, Ruth Liaw; President, C.A. Chuang; President, Unit: NT$ Total Techi Juan; President, Simon Wang 94,149,824 94,149,824 2,0250,000 2,0250,000 49,537,799 49,641,399 Cash 33,947,590 Stock - Cash 33,947,590 Stock % % New restricted employee shares Compensation from investees other than subsidiaries 27,000 Transportation allowance 2,494,734 2,494,734 Note 1: The Company s contribution to employee s pension account, not actual amount paid Range of compensation to management executives Range of compensation to executives On a stand-alone basis Name of management executives On a consolidated basis NT$0~NT$1,999, NT$2,000,000~NT$4,999, NT$5,000,000~NT$9,999,999 H.S. Wang, Ariel Hwang, Jay Hong, Egon Chen, Chien Chen, Tom Koh, Jeff Ku, Sean Hsieh, Paul Huang, Steve Chou, Joseph Yang, Ruth Liaw, C.A. Chuang, Techi Juan, Simon Wang H.S. Wang, Ariel Hwang, Jay Hong, Egon Chen, Chien Chen, Tom Koh, Jeff Ku, Sean Hsieh, Paul Huang, Steve Chou, Joseph Yang, Ruth Liaw, C.A. Chuang, Techi Juan, Simon Wang NT$10,000,000~NT$14,999,999 Rosie Yu, James Chang Rosie Yu, James Chang NT$15,000,000~NT$29,999,999 Cliff Lai, Vivien Hsu Cliff Lai, Vivien Hsu NT$30,000,000~NT$49,999, NT$50,000,000~NT$99,999, NT$100,000,000 and above - - Total Note: Compensation paid to managers in the above table was based on tenure. Compensation paid to managers who also served as directors is detailed in the Compensation to directors table. 26

16 5. The names of managers and their employee bonuses Title and name of managers Stock bonus Cash bonus Total Unit: NT$ As of March 15, 2013 As a % of net profit Co-President, Cliff Lai Co-President, Vivien Hsu Chief Financial Officer, Rosie Yu Acting Chief Technology Officer, H.S. Wang President, Ariel Hwang President, Jay Hong President, James Chang President, Egon Chen President, Chien Chen President, Tom Koh Deputy Chief Operating Officer of the Consumer Business, Jeff Ku President, Sean Hsieh President, Paul Huang President, Steve Chou President, Joseph Yang Chief Accounting Officer, Darren Shih - 34,232,558 34,232, % Compensation to directors and management executives as a percentage of net income over the past two years and guiding principles 1. Compensation to directors Type Year Compensation to directors As a % of net profit Unit: NT$ Net profit On a stand-alone basis ,035, % 13,468,763, ,899, % 14,691,604,514 On a consolidated basis ,083, % 13,626,179, ,955, % 14,916,282,008 Guiding principles for compensation to directors Remuneration policies, standards and package (1) The board is authorized to decide the remuneration for the chairman and vice chairman, but it should not be higher than the remuneration payable to the president of the Company. (2) s are paid according to the resolution on earnings distribution approved at the annual general shareholders meeting. Remuneration or other equivalent allowance for directors is based on their involvement in the Company s operations and contribution to the Company, the Rules for Setting s Remuneration and industry norms. (3) Transportation allowances are paid quarterly based on attendance in board meetings and for services rendered as the chairman or a member of the Audit Committee and Compensation Committee. 27

17 Procedure for setting remuneration (1) In accordance with the Company s Articles of Incorporation, compensation to directors shall not exceed 0.3% of the Company s annual net income after deducting losses from previous years, appropriating 10% thereof for legal reserves, and setting aside or reversal of special reserves. (2) Transportation allowances are determined in accordance with the Rules for Setting s Remuneration. Performance factor Compensation to each director is assessed based on his/her contribution to the operations of the Company and the board. The Compensation Committee reviews the compensation mechanism periodically, taking future operating risks, environmental conservation and corporate social responsibility into consideration. 2. Compensation to management executives Type Year Compensation to management executives As a % of net profit Net profit Unit: NT$ On a stand-alone basis On a consolidated basis ,431, % 13,468,763, ,660, % 14,691,604, ,791, % 13,626,179, ,763, % 14,916,282,008 Guiding principles for compensation to management executives Remuneration policies, standards and package (1) Compensation to the president and vice presidents comprises of a fixed monthly salary and performance bonus. (2) Performance bonuses are determined based on the president s or the vice president s contribution to the Company and the results of an annual performance appraisal. The above-mentioned bonuses are proposed by the Compensation Committee for approval at the board meeting. Procedure for setting performance bonus (1) In accordance with the Company s Articles of Incorporation, employee profit sharing paid to the president and vice presidents comes from the pool of 1% to 3% of the Company s annual net income after deducting losses from previous years, appropriating 10% thereof for legal reserves, and setting aside or reversal of special reserves. (2) Year-end bonuses are set based on the Company s performance and the annual budget approved by the board and the chairman. Performance factor (1) Variable compensations in the form of employee profit sharing and performance-based bonuses account for approximately 50% of the remuneration and are determined based on the president s or vice president s contribution to the Company s operations. The Company shall review the compensation mechanism periodically, taking future operating risks, environmental conservation, and corporate social responsibility into consideration. (2) The Human Resources Department is tasked with preparing the annual compensation for the president and vice presidents and submitting a report to the Compensation Committee. 28