Execution Principles

  • Timely disclosure of material information
  • Checks and balances between the board and management
  • Independent directors should comprise at least 40% of the board: Current ratio is 56%
  • Audit Committee was established to ensure fair and independent financial oversight
  • Nomination and Remuneration Committee was established to bolster corporate governance practices, promote a sound compensation system for directors and managers, and select candidates for directorships
  • ESG Steering Committee was established to promote corporate social responsibility and sustainable operations
  • Adoption of a high cash dividend payout policy
  • Shareholders’ rights are guaranteed, convening shareholders' meetings with hybrid shareholders' meeting, and with the right to vote on all proposals at the annual general 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 three committees: an Audit Committee, a Nomination and Remuneration Committee and an ESG Steering 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

 

 

 

 

 

 

 

 

Nomination and Remuneration Committee
The Nomination and Remuneration Committee, composed entirely of independent board directors, is bound by the “Nomination and Remuneration 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
ESG Steering Committee

The ESG Steering Committee, composed of chairman and 5 independent board directors, is bound by the “ESG Steering Committee Charter.” The committee is responsible for reviewing the annual plans of the subordinate functional groups, supervising and tracking the implementation results, and revising the ESG Steering Committee Charter.

Metric for President(CEO) compensation

President’s performance and remuneration is reviewed by the Nomination and Remuneration 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 ROA、ROE、ROIC、total shareholder return, and the non-measurable external perception metrics such as net-zero target, net promoter score (NPS), DJSI evaluation results and a set of sustainability objectives which are integrated into business operations.In order to strengthen the link between sustainable development goals and CEO compensation, the linkage ratio between variable compensation and ESG performance & other metrics is 30%.

Deferral of Bonus for Short-term CEO Compensation

In Taiwan, due to differences in regulations and cultures, professional managers in Taiwan need to declare their shareholding status, and do not actively purchase Company shares to avoid concerns with conflicts of interest. It is part of Taiwan’s unique culture. Thus, CEO and high-level executives rarely hold company shares and no short-term bonus deferred in the form of shares or stock options.

However, we have a long term incentive plan based on shares, which allows CEO, executives, and employees to acquire company shares. We implemented employee share ownership trust (ESOT) program to support the Company’s strategy by incentivizing the delivery of growth, increase in profitability, superior shareholder returns and sustained financial performance. CEO joined ESOT program by contributing certain amount of salary (self-contribution), and company will also contribute equal amount money to trust fund. The trust fund is used to purchase company stock. ESOT is use to ensure that interests of CEO are aligned with long-termshareholders and to provide an incentive for CEO to continue employment relationship with the company. Since 2022, we upgraded our ESOT scheme, allowing CEO, senior executives and employees to increase their contribution amount with no limit.

Our CEO actively participated in the additional contribution of ESOT, which demonstrates CEO's strong identification with the company. By investing in the company through the ESOT, CEO signals to other investors and stakeholders that the company's success is a top priority. CEO's active participation also reinforces his commitment to the company's long-term success and fosters a sense of trust and loyalty among employees and other stakeholders.

Performance Period for Variable CEO Compensation

The performance period for variable CEO compensation is one year and eight months (1.67years).

Time Vesting for Variable CEO Compensation

The time vesting period for variable CEO compensation is one year and eight months (1.67years).

President(CEO) compensation- Long-Term Performance Alignment

  • We have a long term incentive plan based on shares, which allows CEO, executives, and employees to acquire company shares. We implemented employee share ownership trust (ESOT) program to support the Company’s strategy by incentivizing the delivery of growth, increase in profitability, superior shareholder returns and sustained financial performance. CEO joined ESOT program by contributing certain amount of salary (self-contribution), and company will also contribute equal amount money to trust fund. The trust fund is used to purchase company stock. ESOT is used to ensure that interests of CEO are aligned with long-term shareholders and to provide an incentive for CEO to continue employment relationship with the company. Since 2022, we upgraded our ESOT scheme, allowing CEO, senior executives and employees to increase their contribution amount. Our CEO actively participated in the additional contribution of ESOT, which demonstrates CEO's strong identification with the company. By investing in the company through the ESOT, CEO signals to other investors and stakeholders that the company's success is a top priority. CEO's active participation also reinforces his commitment to the company's long-term success and fosters a sense of trust and loyalty among employees and other stakeholders.
  • The shareholdings of CEO equal to 5.18 times the annual base salary. Average shareholdings of other executive committee members equal to 0.34 times their average annual base salary.
  • CEO-to-Employee Pay Ratio (The ratio between the total annual compensation of CEO and the median employee compensation)
  • In 2023, the ratio between the total annual compensation of CEO and the median employee compensation is 31.33.

Clawback provision

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

HR is tasked with preparing and submitting an annual report on CEO’s performance and compensation considerations to the Nomination and Remuneration Committee. Based on the report, the committee will then make the final decision on CEO’s performance-based bonuses and employee profit sharing. If one or more adjustment events, including restatement of financial statements, expected or incurred losses caused by operational misconduct by CEO or through CEO’s direction, have taken place during the year, previously distributed variable compensation would be reclaimed (clawback). In addition, the Company can recover all or a portion of unvested deferred variable compensation based on risks reports issued by its risk management department.