Policy for Determining Remuneration
Our policy for remuneration and other compensations for directors is designed to contribute to the continuous improvement of our operating results/corporate value and the sharing of value with shareholders. Compensation for directors (excluding outside directors and corporate auditors) of the Company consists of a base compensation that is fixed, and a performance-linked compensation that
varies depending on company performance. Performance linked remuneration consists of fiscal year-end bonuses based on consolidated business results for each business year, and remuneration in which the amount paid is linked to the stock price for a certain period (hereinafter referred to as “phantom stock”).
Beginning with phantom stock in 2022, in addition to the stock price requirements, we added an evaluation by an international ESG assessment organization, such as CDP Climate Change, which attaches importance to our performance on climate change.
From 2024, in addition to the above requirements, we have added the achievement of “employee engagement target,” “customer satisfaction target,” and “CO2 emissions reduction target” as ESG indicators. Through these measures, we are building a system in which executive compensation is linked to the promotion of our sustainability management.
From the perspective of ensuring independence, the remuneration of outside directors is not linked to business performance, and only the base remuneration is paid.
Decision Process
The Board of Directors determines the remuneration, etc. of directors based on the proposals of the Remuneration Committee, an advisory body to the Board of Directors. From an independent and objective standpoint, the Remuneration Committee determines individual base remuneration proposals based on individual performance and abilities, within the maximum amount of remuneration resolved at the General Meeting of Shareholders and in accordance with the Remuneration Regulations and Remuneration System for Directors and Corporate Auditors. In addition, the Board of Directors deliberates appropriately on the remuneration of directors, including the determination of proposed bonuses for the fiscal year, taking into consideration the business performance of the Group.
Shareholding Guidelines
Skylark Group has established Shareholding Guidelines to align the interests of its management with those of shareholders and to enhance corporate value over the medium to long term.
These guidelines stipulate that our Executive Directors and Corporate Officers are required, within five years of appointment to their respective positions, to hold a number of Company shares*. The target value of shares to be held is set for each position as a percentage of base remuneration: 50% for the Chairman and President, 25% for Directors, and 20% for Corporate Officers. This value is calculated based on the closing price of the Company's common stock on the last day of the preceding fiscal year.
*For the purpose of these guidelines, "Company shares" includes common shares held directly by the executive and those held through the Employee Shareholding Association.
Other Important Matters of Compensation
The performance-linked compensation for the fiscal yearend bonus and phantom stock has malus and claw back clauses that allows the Board of Directors to reduce or require the return of part or all of the compensation by resolution after deliberation by the Remuneration Committee in the event of a material accounting error, fraud, violation, etc. beginning in 2022.
For details, please see the Securities Report (Japanese text only)
Investor Relations（IR）"The Securities Report"