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Executive Compensation

Remuneration Policy and Decision Process

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”). Starting with phantom stock in FY2022, evaluation score of an international ESG assessment body has been added as an ESG indicator in addition to the above stock price requirement, to create a system in which executive compensation is linked to the progress 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. The Board of Directors determines remuneration and other compensation for directors based on proposals from the Remuneration Committee, which is an advisory organization of the Board.
Beginning in FY2022, the performance-linked compensations of the fiscal year-end bonus and phantom stock have malus and clawback clauses which, in the event of a material accounting error, fraud, or violation, allow the Board of Directors, by resolution, to reduce or to require the return of such compensation, in part or in full, after deliberations by the Remuneration Committee.

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"