Policy for Determining Remuneration
Our policy for director remuneration is to ensure a system that contributes to the sustainable enhancement of corporate performance and corporate value while promoting the sharing of value with our shareholders. Remuneration for the Company’s Directors, including the CEO (excluding Outside Directors and Directors who are Audit & Supervisory Committee members), consists of base remuneration, performance-linked remuneration, and stock remuneration. Performance-linked remuneration consists of bonuses based on consolidated results for each fiscal year, and stock remuneration consists of restricted stock remuneration contingent upon achieving specific stock price requirements at certain points in time.
Since 2022, the Company has introduced a remuneration system that emphasizes ESG factors in addition to stock price requirements, incorporating evaluations from international ESG rating agencies such as CDP Climate Change, which places importance on performance related to climate change. Furthermore, in addition to the above requirements, we added targets for employee engagement, customer satisfaction, and CO2 emission reductions as ESG indicators starting in 2024, and have added a target for the ratio of female managers starting in 2026, establishing a mechanism that links the promotion of our sustainability management with executive remuneration.
To maintain independence, Outside Directors receive only base remuneration, which is not linked to business performance.
In principle, the restriction period for stock remuneration lasts until the time of retirement. The total of the vesting period and the required holding period is designed as a long-term framework of 10 years or more, based on the average expected tenure of representative directors, including the CEO. This closely aligns the economic interests of the management team with the long-term interests of shareholders.
Decision Process
The Board of Directors determines the remuneration for directors based on proposals from the Remuneration Committee, which serves as an advisory body to the Board.
From an independent and objective standpoint, the Remuneration Committee determines individual base remuneration proposals based on each director's performance and abilities, within the maximum amount resolved at the General Meeting of Shareholders and in accordance with the Remuneration Regulations and System for Directors and Corporate Auditors. In addition, the Board of Directors deliberates appropriately on director remuneration, including the determination of proposed bonuses for the fiscal year, taking into consideration the Group's business performance.
The Remuneration Committee is composed of a majority of Outside Directors to ensure its independence. To verify the appropriateness of remuneration levels, the Committee also obtains objective advice from external independent experts as needed.
In our officer remuneration regulations, we strive to ensure transparency by clarifying the remuneration structure, decision-making process, and evaluation indicators.
Through this process, we enhance the link between remuneration and the improvement of corporate value, aiming to share value with our shareholders.
Shareholding Guidelines
Skylark Group has established Shareholding Guidelines for the purpose of promoting value sharing between management and shareholders and enhancing corporate value over the medium to long term.
Under these guidelines, the Company’s Directors engaged in business execution and Executive Officers are required, in a specific fiscal year within five years of appointment to a certain position, to hold Company shares* equivalent in monetary value to a certain percentage of their base remuneration as of April 1 of that fiscal year (calculated based on the closing price of the Company’s common stock on the last day of the preceding fiscal year). The target ownership levels are defined by position: 300% of base remuneration for the CEO, 100% for the COO and Executive Directors, 50% for other Directors, and 25% for Executive Officers.
*For the purpose of these guidelines, "Company shares" refer to common shares of the Company held directly by the executive and those owned through the shareholding association. Only vested common shares are subject to calculation; unvested shares and options are excluded. In addition, hedging transactions involving held shares are prohibited.
The actual shareholdings (as a ratio to base remuneration) as of May 2026 are as follows:
- Representative Director and CEO: 2.75 times
- Representative Director and COO: 0.871 times
- Executive Director and CFO: 0.374 times
Other Significant Matters Related to Remuneration
The Company has established malus and clawback provisions applicable to performance-linked and stock-based remuneration. In the event of material accounting errors, fraud, or other misconduct, these provisions allow the Board of Directors, following deliberation by the Remuneration Committee, to resolve to reduce or demand the return of all or part of the relevant remuneration.
For details, please see the Securities Report (Japanese text only)
Investor Relations（IR）"The Securities Report"