From employees’ perspective, safety, friendly environment and high-quality facilities are critical support for their undivided devotion to work, but more importantly, the Company must provide comprehensive payroll and benefit policy.

Compensation

FENC established a variable payroll system that rewards long-term individual and team performance. The Articles of Incorporations stipulates that 2%-3.5% of the Company’s net profit shall be dedicated toward employee compensation. Please refer to Performance Review for details. Company- and Business-wide performance is taken into consideration for determining the monthly and annual employee bonuses. For production bonuses, additional consideration includes the actual output rate, scrappage rate, quality, energy as well as occupational safety. The bonus system is a means to encourage all units to ensure occupational safety and protect the environment through energy conservation, carbon reduction and recycling, and to incentivize employees to optimize the production flow and fully embody corporate sustainability.

Mid-level managers and above may participate in the employee stock ownership plan (ESOP), which purchases Company shares systematically with 15% contribution from the Company. A trustee manages the shares and calculates the trust property equity. Upon termination of employment, employees may redeem the investment in the form of stocks or cash. ESOP offers a long-term option for employee bonus and investment returns.

Compensation for executive levels above executive vice president is based on corporate performance and the market average. In addition, the compensation is adjusted based on performance review and factors in future operational risks. The Company does not offer signing or recruitment bonus for senior managers. Considerations for compensation of other employees include overall corporate and departmental performance; pay rates among listed companies; market survey provided by professional consulting firms; overall financial and management risks. Stock options are not available for regular employees, and the company policy does not include deferred or vested share options.

The remuneration policy for the Board members and managers is discussed during the Remuneration Committee meeting, which is convened by the independent Board members. The discussions are presented for Board approval and results are presented at the shareholder meeting. Please refer to Board Structure and Remuneration for details.

FENC sites in Taiwan, mainland China, Japan and the U.S. are mainly in the mid- to up-stream industries with high reliance on the chemical technology, a field where male employees tend to outshine female staff. Hence, they are better paid. Sites in Vietnam see a higher concentration on the downstream garment industry, in which female employees tend to excel, hence receiving higher salaries than their male counterparts.

There is a gender difference among different industries within FENC’s industry chain. However, gender strengths are also reflected in the salary level, which is a reflection of the Company’s fairness in internal training and performance review.

Salary Ratio by Gender

Salary Comparison to Market Level

The employee performance review is conducted annually. Based on the business operation as well as employee performance and competency, adjustments are made to salaries, bonuses and promotions. The review mechanism serves to inspire employee dedication and create a win-win by increasing both personal earnings as well as corporate growth. The following is the result of the 2022 salary comparison:

Ratio of Salary Between the Highest Salary and Median Salary in 2022

Ratio of Salary Increase Between the Highest Salary and Median Salary in 2022