Company: ZLAB
Filing Date: 2025-04-18
Form Type: PRE 14A
Source: 0001628280-25-018384
Chunk: 44

Company: Zai Lab Ltd
Filing Date: 2025-04-18
Form: PRE 14A
Chunk 44
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% of our outstanding shares, and we met with any shareholder that expressed an interest in meeting. In response to our outreach, our shareholders generally noted that they had no concerns or questions that would warrant a conversation during these off-season shareholder engagement efforts. However, in consideration of shareholder feedback received over the past several years, we refined our program in 2024 and 2025 to be responsive to that shareholder feedback, as discussed below. We are committed to having an open dialogue with our shareholders, and the Compensation Committee will continue to assess and refine the Company’s executive compensation program to meet the Company’s executive compensation objectives, considering the current business needs and macroenvironment, shareholder feedback, and input from the Compensation Committee’s independent compensation consultant.

What We Heard and How We Responded

Our ongoing engagement with shareholders has been instrumental in shaping recent enhancements to our executive compensation program. Based on investor feedback, the Compensation Committee made refinements to the Company’s executive compensation program in 2024 and 2025, including increasing the weighting of corporate performance for the 2024 annual incentive awards and adding performance share units (“PSUs”) into the annual long-term incentive (“LTI”) mix for 2025 to further align executive compensation and Company performance.

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| What We Heard                                                                                                                                                                                                                                                                                                                                                                                                    |     | How We Responded                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Shareholders appreciate the use of both quantitative and qualitative metrics in determining annual incentives, but would like more emphasis on and accountability for corporate results for our CEO.                                                                                                                                                                                                             |     | Beginning with the annual cash incentive award for 2024, to further emphasize and promote CEO accountability for corporate results, the Board of Directors decided in 2024 to change the weighting of corporate and individual performance for the CEO by increasing the weighting for corporate performance from 75% to 90% and reducing the weighting for individual performance from 25% to 10%. After further consideration, the Board of Directors subsequently decided to eliminate the individual performance component of the CEO’s annual incentive award beginning with her 2024 annual cash incentive award. For all other NEOs, the Compensation Committee increased the weighting of corporate performance from 60% to 80% and reduced the weighting of individual performance from 40% to 20%. |
| Shareholders recognized that introducing PSUs must be timed appropriately, but sought greater transparency into how the Compensation Committee determines the mix of equity awards. While they understood the rationale for not including PSUs in the executive compensation program previously,