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, excluding Outside Directors and Audit & Supervisory Committee members, consists of fixed base remuneration, performance-linked bonuses based on consolidated results, and restricted stock remuneration contingent upon achieving specific stock price requirements.
Since 2022, we have emphasized ESG factors by incorporating evaluations from international agencies such as CDP Climate Change. Furthermore, starting in 2024, we added targets for employee engagement, customer satisfaction, and CO2 emission reductions as ESG indicators to further link executive compensation with our sustainability management.
To maintain independence, Outside Directors receive only base remuneration, which is not linked to business performance.
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 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 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"