Officer Compensation

Compensation of the company’s directors consists of three types: base compensation paid according to the director’s role and responsibilities, performance-based bonuses as a short-term incentive, and stock-based compensation, which raises directors’ awareness of contributing to medium-to-long-term corporate value and clarifies the linkage of that value with set each director’s compensation at an appropriate level, taking the director’s duties into consideration. Regarding the compensation ratio by compensation type, there are no major differences based on position, but higher-ranking directors have a higher ratio of performance-based compensation. In view of their duties, outside directors are paid only base compensation.

The base compensation of the company’s directors is a monthly fixed salary according to the director’s position. The standard amount for each position is set based on a comprehensive review that includes referring to information such as officer compensation surveys by external research organizations, comparing the amount with data from other companies of similar size in the same industry and business category, and taking the level of employee compensation into consideration.

Bonuses of the company’s directors (excluding outside directors) are performance-based compensation that reflects consolidated business performance and are linked with the medium-term business plan. The amount of payment is calculated by multiplying the standard bonus by position by the ratio of consolidated ordinary profit for the fiscal year to consolidated ordinary profit for the reference year (fiscal year ended March 31, 2021), and is paid at a fixed time every year.

The company has introduced a stock-based compensation plan using a Board Benefit Trust (BBT) plan. As stock-based compensation for directors (excluding outside directors), the company contributes up to JPY270 million (over three fiscal years) as funds for stock acquisition in accordance with the company’s stock-granting regulations, and grants a total of up to 30,000 points (1 point = 1 share) per fiscal year, with the number of points determined in accordance with the position of each director. Directors shall receive the company’s shares upon their retirement from office, in principle.

The company has established a Nomination and Compensation Advisory Committee mainly comprised of outside directors.
The Nomination and Compensation Advisory Committee deliberates on the compensation of directors and the Board of Directors makes a resolution based on compensation limits approved at the General Meeting of Shareholders. The allocation of base compensation and bonuses for each individual is determined by the representative director, president based on a resolution of the Board of Directors.