Board Composition

TitleNameCompensation CommitteeAudit CommitteeNomination Committee Risk  Mgmt. Committee
Chairman of Board Liang, Li-Sheng V (Convener)   V (Convener)
Director Pan, Yung-Chung V   V
Director Pan, Yung-Tai   V
Director

Lee, Ji-Ren

(Representative of Green Land Investment Limited)

V    
Independent Director Cheng, Chih-Kai V (Convener) V V    
Independent Director Wu, Chun-Pang  V V(Convener)   V
Independent Director Wang, Jia-Chyi V     V
Independent Director
Shen, Ying-Chuan
V V      
Independent Director Duh, Jia-Bin V V V   V

 

Compensation Committee Roles

1. Set and regularly review the policy, system, standard and structure of remuneration for directors (including the Chairman), and managerial officers above the grade of President and Vice President based on the Company's goals, business performance, competitive environment and other factors.
2. Evaluate the outcomes of performance targets set for directors, the Chairman, and managerial officers above the grade of President and Vice President on a regular basis, then set the content and amount of individual remuneration based on individual performance evaluations. The content and amount of directors' remuneration should be reasonable and linked to the BOD performance.
3. Assess and determine the level of benefits for managerial officers above the grade of President and Vice President.
 

2020 Compensation Committee Minutes

Date Discussion
2020/01/16 1. Passing of the proposed distribution of executive bonuses for 2019.
2. Passing of the proposed bonus for the Chairman in 2019.
3. Passing of the 2019 annual report of the Compensation Committee.
2020/03/10 1. Passing of the 2020 bonus plan for executives and key officers.
2. Passing of the 2020 Chairman’s performance target and bonus plan.
3. Passing of the proposal to issue "Restricted Employee Shares."

4. Passing of the "Guidelines for Issuing New Restricted Employee Shares for 2020"

5. Passing of amendments to several clauses of the "Articles of Association for the Compensation Committee."
2020/04/08 1. Passing of amendments to the proposed issue of "Restricted Employee Shares."
2. Passing of amendments to the "Guidelines for Issuing New Restricted Employee Shares for 2020."
3. Passing of proposed distribution of compensation to employees and directors for 2019.
2020/07/30 1. Passing of the 1st allocation of new restricted employee shares in 2020
2020/11/06 1. Passing of 2020 adjustments to executive remuneration
2. Passing of amendments to the “Regulations Governing Assignment of Company Vehicles to Executives”

3. Passing of new “Regulations Governing Executive Health and Benefits”

 


Nomination Committee Roles

1. The identification of suitable candidates for recommendation to the BOD for appointment as Primax directors, President, CEO, CFO, and directors and supervisors at key subsidiaries.
2. A review of the qualifications of nominated candidates and advice to the BOD about any replacements that should be made.
3. The Committee currently has three independent directors. Mr. Ku, Tai-Chao and Mr. Cheng, Chih-kai both have the necessary financial, leadership and decision-making skills required for the Nomination Committee.
● Meeting convened on November 6, 2020
● Details on the committee charter and meeting attendance can be found in the Primax Nomination Committee Charter and Market Observation Post System website .
 
Title Name Gender Academic and career background Position(s) concurrently held in the Company or other companies

BOD Attendance Rate (by term)

Chairman/General Manager Liang, Li-Sheng Male Major in Business Administration, Tamkang University
Chairman of Primax Electronics
Primax Tech.(Cayman Holding) Ltd. Director, Polaris Electronics Inc. Director, Destiny Tech Holding Co., Ltd. Director, Chairman of DongGuan Primax Electronic & Telecommunication Products Ltd., Chairman of Primax Electronics. (KunShan). Corp., Ltd. PRC, Chairman of Primax Destiny Co., Ltd. (Japan), Director/ Legal Representative of Diamond(Cayman) Holdings Ltd. , Director/ Legal Representative of Tymphany Worldwide Enterprises Ltd., Director of Alpine Asia Investment Limited, Director of Tymphany Logistics, Inc., Director, Chairman of Tymphany Acoustic Technology(Huizhou) Co., Ltd., and Director of Tymphany Acoustic Technology Limited. Director, Primax AE (Cayman) Holdings Ltd. Director, Primax Electronics(Singapore) PTE. Ltd. Director, Primax Electronics(Thailand) Co., Ltd.    100%
Director Yang, Chi-Ting Male MBA, University of Southern California, U.S.
Chief Auditor, Chailease Finance Co., Ltd.
Chairman and General Manager of Chailease Auto Rental Co., Ltd., Chairman and General Manager of Apex Credit; Supervisor of Fina Finance & Trading Co., Ltd., Chairman of Asia Sermkij Leasing Public Co., Ltd., Chairman of Bangkok Grand Pacific Lease Public Co., Ltd. 91%
Director Pan, Yung-Chung Male Major in Electronic Engineering, Feng Chia University
General Manager of Business Department, Primax Electronics
Primax Ind.(HK) Ltd. Director, Primax Tech.(Cayman Holding) Ltd. Director, Primax Ind.(Cayman Holding) Ltd. Director, Legal Representative of Tymphany Worldwide Enterprises Ltd., Director of Tymphany HK Ltd., Director and General Manager of Tymphany Acoustic Technology (Huizhou) Co., Ltd, Executive Director and General Manager of Dongguan Tymphany Acoustic Technology Co., Ltd., Executive Director and General Manager of Dongguan Dongcheng Tymphany Acoustic Technology Co., Ltd., Director of Tymphany Acoustic Technology HK Ltd., Director of Tymphany Acoustic Technology Limited, Director of Gratus Technology Corp., Director, Tymphany Acoustic Technology (Thailand) Co., Ltd. Director , Primax Electronics(Singapore) PTE. Ltd. Director, Primax Electronics(Thailand) Co., Ltd. Director 95%
Director Pan, Yung-Tai Male Major in Mechanical engineering, Chung Yuan Christian University
General Manager of Business Department, Primax Electronics
Legal Representative Director of Tymphany Worldwide Enterprises Ltd., Deputy Chairman of Tymphany Acoustic Technology(Huizhou) Co., Ltd., Director of Tymphany Acoustic Technology (Thailand) Co., Ltd. Director , Primax Electronics(Singapore) PTE. Ltd. Director, Primax Electronics(Thailand) Co., Ltd. Director 91%
Independent Director Ku, Tai-Chao Male Bachelor of Business, Law School, National Taiwan University
Vice President, Taiwan Securities Exchange
None 95%
Independent Director Cheng, Chih-Kai Male Graduate School of Management Science, National Chiao Tung University
Senior Vice President of Synnex USA
Eureka Therapeutics (California)Director of Eureka Therapeutics (California), Chairman of B Current Impact Investment Inc., Director of Social Enterprise Insights, Director of H3 Platform, Chairman of B Current Impact Investment Inc. II, and Partner in Acorn Pacific Ventures. 95%
Independent Director Wu, Chun-Pang Male MBA, University of Missouri, U.S.
President, Taiwan Branch, Deutsche Bank
Director, Far Eastern International Commercial Bank 100%
Independent Director Wang, Jia-Chyi Female MBA, Kellogg School of Management, Northwestern University  
Managing Director and Director, Zenith Consulting Co., Ltd.
Managing Director and Director of Zenith Consulting Co., Ltd., Managing Partner of CITIC Capital Holdings Ltd.
100%

 

Diversification of The Board members

Board members at Primax Electronics are chosen through nomination and elected by all shareholders in a transparent, electronic voting session. All members possess the necessary abilities, knowledge and experience to exercise their powers and responsibilities. All directors consider long-term interests of the the Company' and shareholders' to be their top priority, and formulate their strategies in an objective manner. The Primax Board is convened at least once a quarter. Ten Board meetings were convened during 2020 and the average attendance rate for all directors was 98.75%.

Board diversity is important to Primax and phased targets have been set: The number of women or foreigners sitting on the Board must exceed 10% by 2021 (completed), exceed 20% between 2024 and 2027, and exceed 30% between 2030 and 2033.

Eight people sat on the Primax Board in 2020 including four independent directors (50%). Two of the independent directors have been in the position for fewer than 3 years, one independent director has been in position for between 4 to 6 years, and one independent director has been in position for 9 to 12 years. There were seven male directors (87.5%) and one female director (12.5%) on the board. Two directors were aged between 71 and 75 years of age (25%), five were aged between 61 to 70 years of age (62.5%), and one was aged between 51 and 60 yeas of age (12.5%). Board directors therefore come from different age groups and generational change is gradually taking place.

In terms of the professional backgrounds of the directors: eight had experience in the industry and management (100%). One was experienced in R&D (12.5%), two had backgrounds in marketing (25%), and three had financial experience (37.5%). In terms of the professional knowledge and skills required for directors, eight possessed the necessary knowledge and skills for leadership, decision-making, operations and management (100%); six of them had knowledge and skills of risk management (75%); three had an IT background (37.5%); five had financial and accounting backgrounds (62.5%), and two had legal knowledge and skills (25%).

Category  Name  Basic Composition    Professional Experience      Professional Knowledge and Skills       
Gender Nationality Age   Length of Service as Independent Director   Industry  R&D  MKT. Finance  Mgmt.  Leadership and Decision-making Biz. Mgmt. Risk Mgmt. IT F & A  Legal Affairs
Director  Liang, Li-Sheng Male Republic of China    71~75 
V V  V V V V V
 Director Pan, Yung-Chung Male Republic of China 61~70 V   V   V V V V   V
Director  Pan, Yung-Tai Male Republic of China
V V     V V V   V    
Director  Lee, Ji-Ren
(Representative of Green Land Investment Limited)
Male Republic of China V   V   V V V V   V  
Independent Director  Cheng, Chih-Kai Male Republic of China 3 to 9 years   V V V V V V
Independent Director  Wu, Chun-Pang Male Republic of China Less than 3 years

    V V V V V V   V V
Independent Director  Shen, Ying-Chuan Male Republic of China V V V   V V V V V V  
Independent Director  Duh, Jia-Bin Male Republic of China  V   V V    
Independent Director  Wang, Jia-Chyi Female Republic of China 51~60 V   V

Note 1: Mr. Ku, Tai-Chao has been an independent director for more than three terms as his financial background, familiarity with the relevant regulations, and expertise in corporate governance can make a significant contribution to the Company. He can therefore draw upon his expertise to provide the BOD with his professional opinion while exercising his powers as an independent director.

Continuing education of directors

To improve the performance of board members, training courses are arranged by the Company in accordance with "Primax Electronics Corporate Governance Principles", "Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies", and other relevant regulations on the latest domestic and overseas developments in economic, environmental and social governance. Topics included finance, risk management, business, commerce, accounting, law, corporate governance, integrity, ethics, and corporate social responsibility. These training courses help board members maintain their values, professionalism and capabilities. The 8 Primax directors attended 51 hours of continuing in education during 2020 and complied with the requirements set by“Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.”Re-elected directors were required to complete at least 6 hours of training during their term, while newly-elected directors were required to complete at least 12 hours. Please refer to the table below for further details on the continuing education of directors during 2020.

Title Name Date of Appointmen Date of Initial Appointment Date of Class Conducting Entity   Name of the Class Course Duration

Total Training Hours for the Year

Director Liang, Li-Sheng 2018/05/30 2009/05/30 2020/09/02 Taiwan Investor Relations Institute Legal Obligation and Responsibility in the Capital Market   3 6
2020/09/18 Accounting Research and Development Foundation  Explanation of Laws Related to Common Corporate Governance Deficiencies   3
Director Yang, Chi-Ting 2018/05/30 2011/03/11 2020/08/11 Taiwan Corporate Governance Association Compliance with Personal Data Protection, Trade Secret Protection, and Anti-Bribery Laws 3 6
2020/08/13 Taiwan Corporate Governance Association Trends and Best Practices in Corporate Governance and Corporate Social Responsibility 3
Director Pan, Yung-Chung 2018/05/30 2014/09/05 2020/10/27 Taiwan Investor Relations Institute Green Swan: ESG Matters in Investment 3 6
2020/11/06 Taiwan Investor Relations Institute Key to Corporate Sustainability: Corporate Professionalism and Family Professionalism  3
Director Pan, Yung-Tai 2018/05/30 2014/09/05 2020/09/25 Practical Examination of Performance Evaluations for Directors and Supervisors  Explanation of Laws Related to Common Corporate Governance Deficiencies 3 6
2020/11/06 Taiwan Investor Relations Institute Practical Examination of Performance Evaluations for Directors and 3
Independent Director Ku, Tai-Chao 2018/05/30 2010/03/30 2020/07/16 Securities and Future Institute  Artificial Intelligent Principles and Applications   3
2020/08/11 Taiwan Corporate Governance Association  Corporate Reform Strategies 3
Independent Director Cheng, Chih-Kai 2018/05/30 2015/06/29 2020/10/27 Taiwan Corporate Governance Association  ESG Developments and Socially Responsible Investment 3
2020/11/05 中華獨立董事協會  Insider Trading and Non-Arm’s Length Transactions in Taiwan: Regulations and Case Study  3
Independent Director Wu, Chun-Pang 2018/10/25 2017/06/15 2020/02/21 Taiwan Corporate Governance Association Digital Technology and Artificial Intelligent Trends and Risk Management 3
2020/03/27 Taiwan Corporate Governance Association  Industry 4.0 and Innovation-driven Transformation for Enterprises 3
Independent Director   Wang, Jia-Chyi   2019/06/18 2019/06/18 2020/02/14 Taiwan Corporate Governance Association  Key 5G and IoT Technologies and Market Applications 3
2020/02/19 Securities and Future Institute    Assessing Business Performance through Human Resources and Competency Inventories   3
 2020/03/05 Securities and Future Institute  Block Chain Principles and Applications 3

         

Directors' remuneration

A Compensation Committee has been created directly under the board of directors in accordance with the "Primax Electronics Compensation Committee Charter" to review remuneration policies, systems, standards and structures, and to approve and evaluate performance targets for all directors, executives, and managers. None of the committee members have undertaken this role within concurrent Company service.

The remunerations of directors include rewards and compensations. The Company Articles of Association stipulate that should the Company make a profit, no more than 2% of it shall be used as rewards for the directors. This is subject to discussion by the Compensation Committee, resolution of the Board, as well as by presentation to a Meeting of the shareholders. Reasonable rewards are decided by reference to operation performance, contribution to such performance, and the outcome of appraisal by the Board. The Chairman’s remuneration is proposed by the HR Department after a consideration of the competitive environment, the operational risks on the basis of management regulations, and a bonus plan assessment. The Compensation Committee makes a proposal after an assessment of performance which is then submitted to the board for approval. The relevant appraisals and reasonableness of compensations are reviewed by the Compensation Committee and the Board. The remuneration system is subject to review based on the actual operation and relevant laws and regulations.

The Compensation Committee, which has been created directly under the board of directors in accordance with "Primax Electronics Compensation Committee Charter", reviews the remuneration policies, systems, standards and structures, and approves and evaluates performance targets for all directors, executives, and managers. None of the committee members have undertaken this role while concurrently serving with the company.

Directors' remuneration is paid according to the Company Articles of Incorporation. The remuneration of Executives and managers is a combination of fixed salary, a year-end bonus, and variable bonuses that are determined based on yearly performance results. Fixed salaries are set at a level deemed competitive within the industry, whereas variable bonuses are calculated at the beginning of each year based on a number of factors including the overall business environment, company growth, performance targets and weights, and how these targets are accomplished. These sums are reviewed by the Compensation Committee and are subject to approval by the board of directors. The Company may issue stock options, restricted shares or use other incentives of material effect to retain managers who exhibit long-term potential. These incentives are also reviewed by the Compensation Committee and are subject to approval by the board of directors.

Performance Evaluation for Board of Directors

The Board of Directors undergoes a performance evaluation each December in accordance with the Primax "Rules for Performance Evaluation of the Board of Directors." An external evaluation of Board performance must also be conducted once every three years. According to the aforementioned rules, the performance evaluation should cover the following areas at a minimum:

Subject Board of Directors Director members Functional committees
Required areas of assessment

1. Engagement in the operations of the Company.
2. Enhancement of the quality of decision-making of the BOD.
3. Composition and structure of the BOD.
4. The election and continuing education of the members of the BOD.
5. Internal control.

1. Grasping the goal of the company and mission.
2. Awareness of the duties of directors.
3. Engagement in the operations of the Company.
4. Internal relationship management and communications.
5. The election and continuing education of the directors. 
6. Internal control.

1. Engagement in the operations of the Company.
2. Awareness of the duties of a functional committee member.
3. Enhancement to the quality of functional committee decision-making.
4.  Composition of the functional committee and selection of committee members.
5. Internal control.

 

Outcome of the evaluation is rated using a 5-grade scale. Results of the evaluations are also reported to the BOD for review and improvement.

 Material Improvement Needed        Improvement Needed           Average            Good            Excellent     
1 2 3 4 5

 

Grade Description

Excellent  Consistent with better international governance practices.     
Good  Consistent with better domestic governance practices.
Average  Consistent with domestic regulations or general standards.
Improvement Needed  Inconsistent with domestic regulations or general standards to a minor extent    
  Material Improvement Needed     Severe deficiencies exist.

 

Performance evaluations are conducted by Primax for the entire Board, individual Board members, and functional committees (Audit and Compensation) in accordance with the aforementioned rules and scope of evaluation. Evaluations take the form of internal self-assessment by the Board, self-assessment by Board members, and performance evaluations conducted by external bodies, experts or other means as appropriate.

Internal performance evaluation for the 2020 Board of Directors was completed at the end of 2020 in accordance with the rules. The evaluation of the Finance and Administration Department was conducted in questionnaire format. Performance evaluations of the Board, the Board members, and of the Audit and Compensation Committees all produced outcomes ranging from Good to Excellent. The average scores given by directors for each questionnaire ranged from 4.96 (Agree) to 5 (Strongly agree). The Directors concluded that the Primax Board and its functional committees were working smoothly and effectively.

The most recent external evaluation of Board performance was conducted in 2020 by KPMG Taiwan which satisfies the criteria for an external evaluation institution as defined in Article 7 of the “Sample Template of "Self-Evaluation or Peer Evaluation of the Board of Directors of XX Co Ltd." Services provided by KPMG Taiwan include education and training courses for company boards, the improvement of corporate governance, risk management, internal controls and audits. The KPMG evaluation team has all the necessary independence and professionalism.

KPMG completed the assessment in December 2020, using domestic and international tools to carry out an evaluation of best practices. This took three forms: data analysis, questionnaires, and interviews. The areas assessed, including individual aspects, are listed below:

Subject Board of Directors Director members Audit Committee Compensation Committee
Measurement Area 9 Key Aspects and 89 Assessment Items 6 Key Aspects and 27 Assessment Items 6 Key Aspects and 89 Assessment Items 5 Key Aspects and 52 Assessment Items
Aspect Description

1. Establishing a functional board of directors
2. Effective operation of the Board.
3. Professional development and continuing education.

4. Vision of the company.

5. Fulfillment of duties.

6. Supervision of management.
7. The shaping of corporate culture.
8. Communications with stakeholders.
9.
Performance evaluation.

1. Grasp of Company goals and missions.
2. Understanding directors' duties and responsibilities.
3. Professional development and continuing education.

4. Fulfillment of duties.

5. Engagement with Company operations.
6. Internal relationship management and communications.
1.Establishing a functional Audit Committee.
2. Effective operation of the Audit Committee

3. Fulfillment of duties.

4. The establishment of a whistle-blower mechanism.

5. Relationship with the Board
6. Performance evaluation
1. Establishing functional Compensation Committee.
2. Effective operation of the Compensation Committee.
3. Fulfillment of duties.

4. Relationship with the Board

5. Performance evaluation.

 

The outcome of the 2020 external evaluation of general Board performance:

Polices and processes have been put into place for the Board as a whole and for individual directors in accordance with the relevant laws and domestic corporate governance indicators. Board directors possess the relevant qualifications and ability, and there is appropriate division of labor to ensure the effective function of the Board and functional committees (Audit and Compensation Committees). Overall performance was found to range from Good to Excellent.

Recommendations and future improvements derived from the 2020 external performance evaluation of the Primax Board of Directors:

Subject Board and individual directors Audit Committee Compensation Committee
Recommendation 1. Better overseas practices should be added to the Board meetings agendas. Annual work plans and tasks should be developed to aid effective tracking and better exercise of responsibilities.
2. Consider referring ISO and COSO publications on corporate risk management and a sustainable development roadmap for corporate governance 3.0. 1. Better overseas practices should go on the agenda for Board meetings. Annual work plans and tasks should be developed to aid in the effective tracking and exercise of responsibilities.
To ensure greater diligence by the Company on the functioning of the Audit Committee, annual work plans and tasks should be developed for   effective tracking and the exercise of responsibilities. The Company should set annual tasks for the Compensation Committee along with regular reviews. Annual work plans should be developed to aid  effective tracking and the exercise of responsibilities.
Improvement plan 1. The Company plans to improve execution by including regular agendas to the annual work plan.
2. A corporate risk assessment report was presented to the Board in July, 2020. All potential risks relating to strategies, operations, finance and harmful climate change will be consolidated and managed in a proactive, cost-effective manner in the future. This will ensure appropriate risk management for all stakeholders.
The Company plans to improve execution by including regular agendas in the annual work plan. The Company plans to improve execution by including regular agendas in the annual work plan.

The general outcome of all the internal and external performance evaluations were reported to the Board on January 22, 2021. Please refer to the 2020 Annual Report for further details.

The Company "Rules for Performance Evaluation of the Board of Directors"

The avoidance of conflicts of interest

The Company has implemented a "Corporate Governance Code of Conduct" and "Business Integrity Procedures and Behavioral Guidelines." These clearly state, that should a director, manager, board meeting participant, or any of the corporate entities represented by them, be a stakeholder in a matter under discussion at a board meeting, the party must make this fact known to the meeting, disclose the stakes involved, and shall disassociate themselves from all discussions and voting in conflict with the interests of the company. Furthermore, the concerned party may not exercise proxy voting rights on behalf of any other directors. All Company directors are highly disciplined in their conduct, and have always managed to disassociate themselves from agendas that present conflicts of interest. For more disclosures regarding avoidance of such conflict by the highest governance body, please refer to the corporate governance chapter on "Page 18 of the 2019 Annual General Meeting Report."