Hainan Mining revises the compensation plan for directors and senior executives, with the chairman's annual salary set at 2 million yuan and performance-based pay accounting for no less than 50%.

Byline: Financial Observer

On March 24, Hainan Mining Co., Ltd. (Securities Code: 601969, abbreviation: “Hainan Mining”) issued an announcement stating that the company has reviewed and approved a new compensation plan for its directors and senior management personnel. The plan is intended to improve the incentive-and-constraint mechanism, stimulate the initiative of management, and lay the talent foundation for the company’s high-quality development. The new plan will take effect on December 1, 2025, covering the legal term of office for directors and executives.

Compliance of Board Review Procedures

The company convened the 5th meeting of the 6th session of the board of directors on March 23, 2026. The meeting considered and approved the proposal titled “Regarding Revising the Compensation Plan for Directors and Senior Executives.” Under this proposal, the directors’ compensation plan will be submitted to the 2025 annual general meeting of shareholders for approval, and all directors abstained from voting. The executives’ compensation plan was approved with 12 votes in favor, 0 votes against, and 0 abstentions. Director Teng Lei, who concurrently serves as an executive, abstained from voting. The proposal had previously been reviewed and approved by the company’s remuneration and performance evaluation committee.

Clear Compensation System Framework

Under the new plan, directors’ and senior executives’ compensation is divided into multiple categories:

• Independent directors: a fixed allowance system is implemented, with a standard of 150,000 yuan per year (pre-tax), paid on a monthly basis
• Non-independent directors: directors who do not concurrently hold management positions within the company do not receive allowances
• Directors and executives receiving pay from the company: compensation consists of base salary, performance salary, and bonuses (including performance awards and special awards). Among them, the performance salary and bonuses have a combined proportion of no less than 50%

Disclosed Compensation Standards for Core Management Personnel

Performance-Driven Assessment Mechanism

The announcement shows that the performance salary will be assessed comprehensively based on financial indicators set in the individual annual performance appraisal agreement, job KPIs, and the completion of annual key work. To strengthen the incentive effect, the performance salary may be issued in advance monthly, quarterly, or annually. A certain proportion will be retained for settlement after the annual audit report is disclosed, implementing a “refund if excess, top up if shortfall” approach.

For performance awards and special awards, the company will dynamically optimize the incentive plan based on actual annual operating conditions. When full-year operating performance meets the targets, performance awards will be extracted and allocated in a differentiated manner based on job responsibilities, value contribution, and assessment results. Special awards will set up incentive programs around strategic priority tasks (such as breakthroughs in key campaigns, safety production, etc.).

Other Important Provisions

• All compensation amounts are pre-tax; personal income tax will be withheld and remitted by the company
• Directors and senior executives who leave their positions due to board re-election, replacement, resignation, etc. will have compensation calculated and paid according to their actual term of office
• The company may implement long-term incentive measures such as equity incentives and employee shareholding plans according to business needs

Hainan Mining states that this revision of the compensation plan fully takes into account industry compensation levels, regional differences, and role-based contributions. It will further improve the company’s corporate governance structure and promote growth in corporate benefits and sustainable development. Market analysis believes that the plan strengthens the mechanism linking performance with compensation and is expected to enhance management’s business motivation.

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