Midea Group Co., Ltd. — Remuneration Information 2024

Sep 16, 2024

Midea Group Co., Ltd.

Terms of Reference for the Remuneration and Evaluation Committee of the Board of Directors

September 2023

CONTENT

Chapter	1	General Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Chapter	2	Composition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Chapter	3	Duties and Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Chapter	4	Decision-making Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Chapter	5	Rules of Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Chapter	6	Supplementary Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6

Midea Group Co., Ltd. Terms of Reference for the Remuneration and Evaluation Committee of the Board of Directors

Chapter 1 General Provisions

Article 1 In order to regulate the remuneration and evaluation of the directors and senior management of Midea Group Co., Ltd. (the “ Company ”) and improve the corporate governance structure, the Company has established the Remuneration and Evaluation Committee of the Board of Directors and formulated these Terms of Reference in accordance with the Company Law of the People’s Republic of China, the Guidelines for Corporate Governance of Listed Companies, the Rules Governing the Listing of Shares on Shenzhen Stock Exchange, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Hong Kong Listing Rules ”) and other relevant laws, regulations and provisions, and the Articles of Association of Midea Group Co., Ltd. (the “ Articles of Association ”) and other relevant provisions.

Article 2 The Remuneration and Evaluation Committee of the Board of Directors is a specific working body established by the Board of Directors, which is mainly responsible for formulating and reviewing the remuneration policies and plans of the Company's directors and senior management, formulating the appraisal standards for the directors and senior management of the Company and conducting appraisal.

Chapter 2 Composition

Article 3 The Remuneration and Evaluation Committee shall comprise at least three directors, of which the majority shall be independent non-executive directors.

Article 4 The members of the Remuneration and Evaluation Committee shall be nominated by the chairman of the Board of Directors, more than half of the independent non-executive directors or one-third of all directors, and shall be elected by the Board of Directors.

Article 5 The Remuneration and Evaluation Committee shall have one chairperson (convenor), who is an independent non-executive director, to preside over the work of the Committee; the chairperson shall be elected among the members and approved by the Board of Directors.

Article 6 The term of office of the Remuneration and Evaluation Committee shall be the same as that of the Board of Directors. After the term expires, members of the Remuneration and Evaluation Committee can be re-elected. If any member ceases to be a director of the Company during the term of office, he/she automatically loses his/her membership of the Committee and the Committee shall fill the vacancy in accordance with the provisions of Articles 3 to 5 above.

Article 7 The office of the secretary to the Board of Directors is the daily working body of the Remuneration and Evaluation Committee, which is responsible for the preparation of meetings and relevant meeting materials.

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Chapter 3 Duties and Authorities

Article 8 The primary duties and authorities of the Remuneration and Evaluation Committee are as follows:

• (1) to formulate remuneration plans or schemes, policies and structures based on the major scope, duties and responsibilities, importance of positions of directors and the senior management as well as the remuneration level of the relevant positions of other related enterprises; to establish formal and transparent procedures to formulate the above remuneration plans or schemes, and to make recommendations to the Board of Directors. The above remuneration plans or schemes mainly include but not limited to performance evaluation standards, procedures and major evaluation systems, major schemes and systems of rewards and punishments, etc;

• (2) to review and approve the remuneration proposals of the management with reference to the corporate goals and objectives set by the Board of Directors;

• (3) to determine the remuneration packages of individual executive directors and senior management, including benefits in kind, pension rights and compensation payments, including any compensation payable for loss or termination of their office or appointment;

• (4) to make recommendations to the Board of Directors on the remuneration of non-executive directors;

• (5) to consider factors including the requirements of relevant laws and regulations, the remuneration paid by comparable companies, the time to be devoted by and responsibilities of directors and the senior management, the employment conditions of other positions in the Company and whether the remuneration shall be set based on performance;

• (6) to consider the appraisal target plans and appraisal results for senior management for each year and during their terms of office;

• (7) to consider the employee’s income distribution, benefits and other major systems of the Company;

• (8) to supervise and evaluate the effects of the construction and implementation of the evaluation and remuneration systems by the persons-in-charge of the Company’s internal departments, branches and subsidiaries (except the person-in-charge of the internal audit department);

• (9) to review and approve the payment of compensation to executive directors and senior management for loss or termination of employment or appointment so as to ensure that such compensation satisfies the contractual terms, if failed to do so, the compensation must be fair and reasonable and no undue burden is placed on the Company;

• (10) to review and approve the compensation arrangements in relation to the dismissal or removal of directors as a result of misconduct so as to ensure that such arrangements are in compliance with the contractual terms, and in the case where the compensation arrangements are not in compliance with the contractual terms, to ensure that such compensation arrangements shall be fair and reasonable;

• (11) to ensure that no director or any of his/her associates (as defined in the Hong Kong Listing Rules) is involved in determining his/her own remuneration;

• (12) to consider and/or approve matters relating to the share schemes as set out in Chapter 17 of the Hong Kong Listing Rules;

• (13) other duties and powers as conferred by the laws, regulations, departmental rules, relevant regulatory rules of the securities regulatory authority of the place where the shares of the Company are listed, these Rules of Procedure and the Board of Directors.

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Article 9 The primary duties of the chairperson are:

• (1) to convene and preside over meetings of the Committee;

• (2) to supervise and inspect the work of the Committee;

• (3) to sign relevant documents of the Committee;

• (4) to report to the Board of Directors on the work of the Committee;

• (5) to perform other duties and responsibilities as required or conferred by the laws, administrative regulations, rules of the securities regulatory authority at the place where the stocks of the Company are listed, these Rules of Procedure and the Board of Directors.

Article 10 Rights and obligations of the members of the Committee are as follows:

• (1) to attend meetings of the Committee as scheduled, express opinions on matters for discussion at the meetings, and exercise voting rights;

• (2) to suggest topics for discussion at the meetings of the Committee;

• (3) to attend or sit-in the relevant meetings of the Company as audience and conduct investigative studies and obtain the required relevant information, such as reports, documents and information, for the purpose of performing duties;

• (4) to fully understand the duties and responsibilities of the Committee and their own duties as members of the Committee, familiarize with the operation and management conditions, business activities and development status of the Company relating to their duties, ensure their capabilities in performing their duties;

• (5) to provide full assurance for the working time and efforts required to perform their duties;

• (6) to perform other duties and responsibilities as required or conferred by laws, administrative regulations, relevant regulatory rules of the securities regulatory authority and the stock exchange at the place where the securities of the Company are listed, these Rules of Procedure and the Board of Directors.

Article 11 The Remuneration and Evaluation Committee is accountable to the Board of Directors, and proposals formed by the Committee shall be submitted to the Board of Directors for consideration and decision.

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Article 12 The Remuneration and Evaluation Committee of the Board of Directors of the Company is responsible for formulating criterion for assessing and reviewing the directors and senior management and their remuneration policies and plans, and making recommendations to the Board of Directors in respect of the following matters:

• (1) remuneration of directors and senior management;

• (2) formulating or amending share incentive schemes, employee stock ownership schemes, entitlements of incentive schemes participants and conditions of exercising such entitlements;

• (3) stock ownership schemes arrangements for directors and senior management in the proposed spin-off subsidiary(ies);

• (4) other matters as stipulated by the laws, administrative regulations, provisions of the China Securities Regulatory Commission and the Articles of Association.

The Board of Directors shall record and disclose in its resolutions the opinion of the Remuneration and Evaluation Committee and the specific reasons for not adopting or fully adopting the recommendations of the Remuneration and Evaluation Committee.

Article 13 The remuneration plan for the directors of the Company proposed by the Remuneration and Evaluation Committee shall be approved by the Board of Directors and submitted to the general meeting for consideration and approval prior to its implementation. The remuneration plan for the senior management of the Company shall be implemented only after being approved by the Board of Directors.

Chapter 4 Decision-making Procedures

Article 14 The secretary to the Board of Directors shall coordinate relevant departments to provide information for the Remuneration and Evaluation Committee to discharge its responsibilities and powers:

• (1) information on the main financial indicators and completion of business objectives of the Company;

• (2) information on the division of work of the Company’s senior management and their main responsibilities;

• (3) information on the fulfillment of targets involved in the work performance assessment system of directors and senior management;

• (4) information on the operational performance of directors and senior management;

• (5) the Company’s proposed remuneration distribution plan and the calculation basis of distribution method based on the Company’s performance.

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Article 15 The procedures for evaluating directors and senior management adopted by the Remuneration and Evaluation Committee include:

• (1) the directors and senior management of the Company shall report their work and conduct self-assessment to the Remuneration and Evaluation Committee of the Board of Directors;

• (2) the Remuneration and Evaluation Committee shall carry out performance appraisal of the directors and senior management according to the performance appraisal standards and procedures;

• (3) the Remuneration and Evaluation Committee shall propose the remuneration amount and incentive method for the directors and senior management according to the performance appraisal results and remuneration distribution policy, which shall be reported to the Board of Directors after its approval by voting.

Chapter 5 Rules of Procedure

Article 16 All members shall be notified two days prior to the meetings of the Remuneration and Evaluation Committee. But under special or emergency circumstances, the aforementioned notice period for convening an extraordinary meeting may be exempted. The meeting shall be presided over by the chairperson or, if the chairperson is unable to attend, he/she may appoint another member (independent non-executive director) to chair the meeting.

Article 17 Meetings of the Remuneration and Evaluation Committee shall only be held when more than two-thirds of the members are present. Each member shall have one vote, and resolutions proposed shall be approved by more than half of members present at the meeting.

Article 18 The voting at the meetings of the Remuneration and Evaluation Committee shall be undertaken by show of hands or voting. At ad hoc meetings, the voting will be conducted by way of communication means, and subsequently confirmed by signatures.

Article 19 The Remuneration and Evaluation Committee may also invite other directors, supervisors and senior management of the Company to attend the meeting as audience if necessary.

Article 20 The Remuneration and Evaluation Committee may, if necessary, engage an intermediary to provide professional advice on its decision-making at the Company’s expense.

Article 21 When a topic related to a member of the Remuneration and Evaluation Committee is being discussed at the meeting of the Committee, the concerned personnel shall not attend the meeting.

Article 22 When the Remuneration and Evaluation Committee convenes a meeting, the relevant directors and the senior management may be required to be present at the meeting to report on their own performance of duties or to be questioned and such personnel shall not refuse to attend.

Article 23 For matters required to be decided or judged by the Remuneration and Evaluation Committee (no matter whether adopted or not at the meeting) shall be reported to the Board of Directors for review. The Committee members who raise objection are entitled to present their statement at the meeting of the Board of Directors.

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Article 24 The rules of procedures for convening meetings of the Remuneration and Evaluation Committee, voting methods and resolutions approved at the meeting must comply with the provisions of the relevant laws, regulations, the securities regulatory rules of the place where the Company’s stocks are listed, the Articles of Association and these Terms of Reference.

Article 25 Minutes shall be prepared for the meetings of the Remuneration and Evaluation Committee and shall be signed by the members present at the meetings.

Article 26 The resolutions passed at the meeting of the Remuneration and Evaluation Committee and the voting results must be submitted in writing to the Board of Directors of the Company. Meeting minutes should record in detail the matters considered and resolutions, including concerns or dissents raised by Directors. Complete minutes of the Remuneration and Evaluation Committee meetings should be kept by the duly appointed Committee secretary (usually the secretary of the Company). The first draft (for members to express opinions) and the final version (for record) of the meeting minutes should be sent to all members of the Committee within a reasonable period of time after the meeting. Directors of the Company may inspect minutes of meetings at reasonable times on reasonable notice.

Article 27 Members who are present at the meeting and persons attending the meeting as audience shall keep confidential the matters discussed at the meeting, and shall not disclose relevant information without authorization from the chairman of the Board of Directors or Board of Directors; otherwise the relevant personnel shall bear all legal liabilities arising therefrom.

Chapter 6 Supplementary Provisions

Article 28 These Terms of Reference shall be formulated and revised by the Board of Directors, and shall come into force from the date when the H shares issued by the Company are listed on The Stock Exchange of Hong Kong Limited upon the approval of the Board of Directors.

Article 29 Matters not covered in these Terms of Reference shall be implemented in accordance with the provisions of the relevant laws and regulations of the PRC, the securities regulatory rules of the place where the Company’s stocks are listed and the Articles of Association. In case of any conflict between these Terms of Reference and any future laws and regulations of the PRC, the securities regulatory rules of the place where the Company’s stocks are listed or the Articles of Association as amended by legal procedures, the relevant laws and regulations of the PRC, the securities regulatory rules of the place where the Company’s stocks are listed and the Articles of Association shall prevail, and these Terms of Reference shall be amended immediately and submitted to the Board of Directors for approval.

Article 30 The right of final interpretation of these Terms of Reference belongs to the Board of Directors.

Board of Directors of Midea Group Co., Ltd.

18 September 2023

Note: In case of any inconsistency between the English and Chinese version of these terms of reference, the Chinese version shall prevail.

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