Corporate Officer Remuneration

1.Total amount of remuneration by corporate officer title, by type of remuneration, and number of officers receiving

(From April 1, 2020 to March 31, 2021)

Corporate officer title

 

Total remuneration (Millions of yen)

 

Total remuneration by type (Millions of yen)

Number of corporate officers eligible for remuneration

 

Basic remuneration

Stock option

Bonus

Retirement Benefit

Directors
(excluding External Directors)

146

146

7

Audit &Supervisory Board

Members
(excluding External Audit

&Supervisory Board Members)

46

46

3

External Corporate Officer

66

66

7

Total

259

259

17


2.Policy, etc. concerning the determination of the amount of remuneration, etc. for Directors, etc. and its calculation method

The Company will make a 3-tiered director remuneration system consisting of fixed remuneration, short-term incentives ("STI"*1) and medium- to long-term incentives ("LTI"*2), and clarify the breakdown of the remuneration. To be more specific, the Company pays Directors fixed remuneration and STI up to the amended limit of remuneration for Directors approved at the 13th Ordinary General Meeting of Shareholders held on June 25, 2021 ("this General Meeting of Shareholders") (up to 432 million yen per year (of which, the remuneration for External Directors is up to 96 million yen per year),  including salaries as employees for Directors who concurrently serve as employees (including remuneration for Executive Officers)). In addition, LTI is paid as stock remuneration (non-monetary remuneration, etc.) apart from the limit of remuneration for Directors described above. However, STI and LTI are not applicable to External Directors who independently monitor and supervise management, and Directors who do not concurrently serve as Executive Officers. The Company also pays the same fixed remuneration, STI and LTI to Executive Officers who do not concurrently serve as Directors.

*1  STI: Short Term Incentive.
*2  LTI: Long Term Incentive.


Remuneration system for Directors

The Company pays Directors (1) fixed remuneration and (2) STI up to the limit of remuneration for Directors (up to 432 million yen per year, or 36 million yen per month), as well as (3) LTI, which is paid apart from the limit above.

(1) Fixed remuneration

The amount of remuneration prescribed in the Company’s internal rules is paid according to the position (President, Deputy President, Senior Management Executive Officer, Senior Vice President, etc.) and job title (authority of representation, Chairman of the Board of Directors, Nomination and Remuneration Advisory Committee Member, etc.).

Fixed remuneration is paid in monetary form as monthly remuneration.

(2) STI

STI is paid as bonuses to reflect the current year’s performance in the current year.

The base amount for calculation is a certain percentage of the amount calculated based on monthly remuneration.

The Company determines the amount of STI that is subject to adjustment linked to performance in each year (revenue, capital efficiency indicators (ROE), etc.) between 0% (no payment) and 200% (twice as much as the base amount for calculation) of the base amount for calculation, and pays STI in monetary form.

External Directors and Directors who do not concurrently serve as Executive Officers are not eligible for STI.

(3) LTI (non-monetary remuneration)

The employee stock ownership plan (ESOP) is adopted for LTI.

Shares are granted to corporate officers at the time of their resignation.

Points (shares) are determined and consistently granted according to the position and job title.

Additional points are not granted according to performance, while stock value increases serve as an incentive element.

External Directors and Directors who do not concurrently serve as Executive Officers are not eligible for LTI.

Remarks

The ratio of fixed remuneration, STI and LTI is 85:8:7.


With regard to remuneration for Directors, the Company has provided for a method of determining the amount of remuneration in internal rules resolved by the Board of Directors up to a total amount of remuneration approved by resolution at the General Meeting of Shareholders. To be more specific, for fixed remuneration, the amount of base remuneration of individual Directors is determined and paid as monthly remuneration after the amount of remuneration of individual Directors is set according to the base remuneration and job title (such as authority of representation, Chairman of the Board and Nomination and Remuneration Advisory Committee Member) of Directors.

With regard to remuneration for Executive Officers, the Company has provided for a method of determining the amount of remuneration in internal rules resolved by the Board of Directors. To be more specific, with regard to fixed remuneration, the amount of base remuneration for individual Executive Officers is determined and paid as monthly remuneration after the amount of remuneration of individual Executive Officers is set according to the position (President, Deputy President, Senior Management Executive Officer and Senior Vice President, etc.) and job title (Chief Executive Officer, etc.).

 

As bonuses, the Company pays STI that is subject to adjustment linked to performance in each year (revenue, operating profit, capital efficiency indicators (ROE) and qualitative evaluation) between 0% (no payment) and 200% (twice as much as the base amount for calculation) of the base amount for calculation, calculated based on the amount of individual base remuneration.
The Company adopted this method, considering it as appropriate for incentives because indicators can be clarified at the time of setting performance goals for each year and the amount of remuneration fluctuates according to changes in performance. The Board of Directors determined it after the Nomination and Remuneration Advisory Committee discussed and concluded it is appropriate, including the determination of specific indicators and adjustment coefficients linked to performance.
STI is applicable to Executive Officers including those who concurrently serve as Directors. External Directors and Directors who do not concurrently serve as Executive Officers are not eligible for STI.
In addition to the monetary remuneration under the internal rules (fixed remuneration and STI), the Company has introduced a stock remuneration system using trusts ("this system") as LTI for Directors of the Company (excluding External Directors and Directors who do not concurrently serve as Executive Officers).
The purpose of this system is to raise Directors’ awareness of contributing to the improvement of medium- to long-term performance and the enhancement of corporate value by further clarifying the linkage between the remuneration for Directors and the value of the Company's shares, and enabling Directors to share profit and risks arising from share price fluctuation with shareholders. The Company has also introduced a similar stock remuneration system for Executive Officers who do not concurrently serve as Directors.

 

An outline of this system is as follows.

[1] Eligibility for this system
Directors of the Company (excluding External Directors and Directors who do not concurrently serve as Executive Officers)

[2] Initial covered period
From the fiscal year ending March 31, 2022 to the fiscal year ending March 31, 2024

[3] The maximum amount of money that the Company contributes as funds necessary for the acquisition of the Company’s shares to be granted to the eligible Directors under [1] during the covered period under [2] (three (3) fiscal years)
Total amount: 96 million yen

[4] Method of acquiring the Company’s shares
Disposition of treasury shares or acquisition from a stock exchange (including off-hours trading)

[5] Limit to the total number of points and number of shares to be granted to the eligible Directors under [1]
290,000 points per fiscal year
(One (1) point is equivalent to one (1) share of the Company, and the maximum number of points per fiscal year is equivalent to 290,000 shares. However, in the event of a share split or share consolidation involving the Company’s shares, adjustment shall be made in accordance with the relevant split ratio, consolidation ratio, etc.)

[6] Criteria for granting points
Points are granted according to the position, etc.

[7] Timing of granting the Company’s shares to the eligible Directors under [1]
Generally at the time of resignation

In addition to the remuneration system described above, the Company has established an environment in which Directors and Executive Officers can voluntarily acquire the Company’s shares corresponding to a certain amount of money each month through the Executive Shareholding Association in order to enable management from the perspective of shareholders with an emphasis on medium- to long-term performance.


3. Matters related to the policy concerning the determination of the amount of remuneration for Audit & Supervisory Board Members and its calculation method

The amount of remuneration for Audit & Supervisory Board Members was determined to be not more than 9 million yen per month at the 1st Ordinary General Meeting of Shareholders held on June 24, 2009. 

With regard to remuneration for Audit & Supervisory Board Members, the Company has provided for a method of determining the amount of remuneration in internal rules up to a total amount of remuneration approved by resolution at the General Meeting of Shareholders. To be more specific, the remuneration for Audit & Supervisory Board Members comprises the base remuneration set for full-time and part-time members and the remuneration set according to the job title (Chairman of the Audit & Supervisory Board). The amount of remuneration for Audit & Supervisory Board Members is not linked to performance, but fixed. In the internal rules, the Company prescribes the method of determining the amount of monetary remuneration only and does not pay Audit & Supervisory Board Members non-monetary remuneration, such as shares or share acquisition rights, as consideration for executing their duties.

The Company has established an environment in which Audit & Supervisory Board Members as well as Directors can voluntarily acquire the Company’s shares corresponding to a certain amount of money each month through the Executive Shareholding Association in order to enable management from the perspective of shareholders.

 

The internal rules prescribing the remuneration for Audit & Supervisory Board Members have been established by the Audit & Supervisory Board through discussions based on the report on the appropriateness of remuneration by the Nomination and Remuneration Advisory Committee, in order to ensure the consistency with the internal rules prescribing the remuneration for Directors and Executive Officers. Regarding the revision and repeal of the internal rules prescribing the remuneration for Audit & Supervisory Board Members, the Company made a revision in August 2020 that allows Audit & Supervisory Board Members to voluntarily make a certain amount of contribution from their fixed remuneration for acquiring the Company’s shares through the Executive Shareholding Association. Such contribution was previously mandatory, but the revision was proposed to the Nomination and Remuneration Advisory Committee, which concluded that it was appropriate, and was carried out by the Audit & Supervisory Board.