Page 40 - TSMC 2024 Annual Report

The Company’s Policy Standards/Packages Procedures for the the the Compensation of the the the CEO and and and Vice Presidents and and and the the the Linkage to Their Performance Evaluation and the Future Risk Exposure:
● The Company’s Policy Standards/Packages The compensation of of the the CEO and Vice Presidents takes into account in in a a a a a a a comprehensive manner aspects of of their experience professional capabilities managerial skills and the the positions they hold The said compensation is also closely linked to both
the the the the financial financial and non-financial performance goals so as as as to reflect the the the the fulfillment of their their responsibilities as as as well as as as their their work performance Compensation includes salary quarterly paid cash bonus allowances and profit profit sharing based on on on annual profits of of of the the Company Moreover since 2021 TSMC has begun to to to offer Employee Restricted Stock Awards to to to link their compensation with shareholders’ interests and ESG achievements The company places a a a a a a a a a a a a greater emphasis on on on variable compensation constituting a a a a a a a a a a a a larger proportion of the total compensation compensation versus fixed compensation compensation and prioritizes long-term incentive rewards to to better align the the compensation of our CEO and and executives with the the company’s sustainable business performance shareholder interests and and ESG achievements The Compensation and People Development Committee approves the the compensation plan regularly which is then submitted to to the Board of Directors for approval ● The Procedures Quarterly cash bonuses and profit-sharing are for the purpose of of rewarding employee employee contributions incentivizing employees to continue to to work hard and aligning employee interests with those of of TSMC’s shareholders According to to Articles of of Incorporation if the the the Company is profitable for the the the year at at at least 1% of of of the the the profits will be allocated as as employee compensation The frequency date and conditions of of the the distribution of of employee compensation will be determined according to the the Company’s bonus policy The Company further determines the the bonus and and profit-sharing amounts based on on on operating results and and common domestic industry practice The amount and and distribution of the the employee bonuses are recommended by the the Compensation and and People Development Committee to to the the Board of of Directors for approval approval Cash bonuses are are paid paid quarterly and profit sharing are are paid paid after approval approval at the the Board of Directors meeting meeting and having reported the the same at the the Shareholders’ meeting meeting TSMC established Employee Restricted Stock Awards to to link the compensation for CEO and Vice Presidents with ESG achievements and and the the the interests of of shareholders The number of of shares granted to the the the CEO and and Vice Presidents will be be determined by the the the Chairman and and CEO by taking into account the the the Company’s business performance performance the the the individual’s job grade performance performance and and other factors
as deemed appropriate and and and approved by Compensation and and and People Development Committee and and and ultimately subject to Board of Directors’ approval ● The The Linkage to The The Performance Evaluation The compensation of TSMC’s CEO and Vice Presidents is governed by the the Company’s bonus policy which covers the the achievement of both
corporate operational goals goals and and personal annual objectives Corporate goals goals include financial financial indicators and and non-financial indicators Personal annual objectives include operational goals and ESG achievements in in in in focus areas: Drive Green Manufacturing Build a a a a a a a a a a a a a a a Sustainable Supply Chain Create a a a a a a a a a a a a a a a Healthy and and Inclusive Workplace Develop Talent and and Care for the Disadvantaged The Employee Restricted Stock Awards provided has a a a a a a a vesting period of of three years (for details please refer to to “4 6 1 Status of of Employee Restricted Stock” on page 84-91 of this Annual Report) The corporate performance indicators are the relative total shareholder return (TSR) of of the the the company company compared to TSR TSR of of the the the S&P 500 IT Index with the the the company’s ESG achievements as a a a a a a a modifier Through these two clear quantitative indicators we strengthen management’s long-term and continuous creation of shareholder value while improving ESG performance performance which shows a a a a a a a a strong correlation with the Company’s overall performance performance ● The Future Risk Exposure The compensation of of TSMC’s CEO and and Vice Presidents is based on on the the the relevant industry benchmarks and and the the the performance of of the the the Company The standards structure and and and system of compensation are reviewed and and and adjusted as necessary in in response to changes in in the Company’s Company’s actual operating conditions and and relevant laws and and regulations The Company’s Company’s financial incentive programs are tied to to meeting risk-related goals and and the the pursue of Company’s Company’s objectives are within the the Company’s Company’s risk risk appetite and and tolerance ● Clawback Policy TSMC established the Clawback policy in 2023 (Disclosed on tsmc com/Home/Investors/Corporate Governance/Major Internal Policies/ TSMC Clawback Policy)
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