Remuneration Policy for Executive Directors and Senior Management
The primary goal of the remuneration policy on executive remuneration packages is to enable Li & Fung to motivate Executive Directors and Senior Management by linking their compensation to performance with reference to corporate and operating groups' objectives. Under the policy, a Director or a member of Senior Management is not allowed to approve his own remuneration.

The principal elements of Li & Fung's executive remuneration package include:

• basic salary;
• discretionary bonus without capping; and
• share options granted under a shareholders' approved option scheme.

In determining guidelines for each compensation element, Li & Fung refers to remuneration surveys conducted by independent external consultants on companies operating in similar industry and scale.

Basic Salary
All Executive Directors' and Senior Management's remuneration packages including their basic salary are approved by Remuneration Committee at the beginning of the Group's each Three-Year Plan.

Discretionary Bonus
Li & Fung implements a performance-based discretionary bonus scheme for each Executive Director (excluding Group Chairman) and Senior Management. Under this scheme, the computation of discretionary bonus (without capping) is based on measurable performance contributions of operating groups headed by the respective Executive Directors and Senior Management.

Share Option
The Remuneration Committee approves all grants of share options under the shareholders' approved share option scheme to Executive Directors and Senior Management, with regard to their individual performances and achievement of business targets in accordance with the Company's objectives of maximizing long-term shareholder value.

Remuneration Policy for Non-executive Directors
The remuneration, comprising Directors' fees, of Non-executive Directors is subject to regular assessment with reference to remuneration surveys conducted by independent external consultants and a recommendation by the Remuneration Committee for shareholders' approval at the Annual General Meeting.

Reimbursement is allowed for out-of-pocket expenses incurred in connection with the performance of their duties including attendance at Company meetings.