Execution Principles

  • Timely disclosure of material information
  • Checks and balances between the board and management
  • Setting the target share of independent directors on the board at a minimum of 40%
  • Audit Committee was established to ensure fair and independent financial oversight
  • Remuneration and Nomination Committee was established to strengthen corporate governance practices, promote a sound compensation system for directors and managers, and to select candidates for directorships
  • Adoption of a high cash dividend payout policy
  • Shareholders’ rights are guaranteed with the right to vote on all proposals at the annual general shareholders’ meeting or through an electronic voting system
  • Strict compliance with the Code of Ethics and Ethical Corporate Management Best Practice Principles and establishment of an internal audit mechanism

The Company’s corporate governance structure is composed of two committees: an Audit Committee and a Remuneration and Nomination Committee.

Audit Committee
The Audit Committee was set up in June 2008 to replace board supervisors, pursuant to provisions in the Securities and Exchange Act. The committee’s operation is bound by the “Audit Committee Charter” and its main responsibility is to assist the board in overseeing the following:
  • Integrity of the Company's financial statements
  • Independent auditors' appointment (termination) and integrity/performance
  • Internal risk controls
  • Company's compliance with legal and regulatory requirements
  • Company's existing and potential risks
Remuneration and Nomination Committee
The Remuneration and Nomination Committee, composed entirely of independent board directors, is bound by the “Remuneration and Nomination Committee Charter.” The committee is responsible for evaluation of the following matters:
  • Establish a policy, system, standard and structure for directors and managers’ compensation and review them periodically.
  • Decide compensation for directors and managers and carry out periodic evaluations
  • Finding, reviewing, and nominating candidates for directors

Metric for President (CEO) compensation

President’s performance and remuneration is reviewed by the Remuneration and Nomination Committee, and approved by the board meeting. Performance-based compensation of President’s annual salary is determined by a comprehensive evaluation of measurable metrics. The metrics include financial performances such as EPS、EBITDA、ROA、ROE、ROIC、total shareholder return, and the non-measurable external perception metrics such as customer satisfaction, DJSI evaluation results and a set of CSR indicators. The performance period for variable CEO compensation is 2 year. The time vesting period for variable CEO compensation is 2 year. The shareholdings of CEO equal to 1.04 times the annual base salary. Average shareholdings of other executive committee members equal to 0.43 times their average annual base salary.

We hereby explain our current clawback practices on the compensation of Taiwan Mobile CEO. Compensation paid to CEO comprises a fixed monthly salary and performance bonus. Variable compensation is comprised of employee profit sharing and performance-based bonuses. Performance-based bonuses account for approximately 50% of the remuneration and are determined based on CEO’s contribution to the Company’s financial performance and achievements of strategic milestones. The Company reviews the compensation mechanism periodically, taking future operating risks, environmental conservation and corporate social responsibility into consideration.

The Human Resources Division is tasked with preparing and submitting an annual report on CEO’s performance and compensation considerations to the Remuneration and Nomination Committee. Based on the report, the committee will then make the final decision on CEO’s performance-based bonuses. If one or more adjustment events, including restatement of financial statements, significant losses, or material failure of risk management due to misconduct (such as fraud or misleading disclosures) by CEO or through CEO’s direction, have taken place during the year, previously distributed performance bonus would be reclaimed (clawback). In order to further elevate our corporate governance practices, the board has plans to revisit and seek improvement of our CEO compensation clawback policy design in the next board retreat.