Officers' Compensation

Basic Policy

In order to realize our corporate philosophy and medium-term management plan, we have adopted the following basic policies regarding the remuneration for Directors.
(1)The level of remuneration should be competitive and commensurate with the Company's profitability
(2)The level of remuneration should be commensurate with each officer's responsibilities and expected role, and function as appropriate compensation
(3)The Plan^* must be a remuneration system that promotes profit sharing with shareholders
(4)The Plan^* should function as healthy incentive for enhancing corporate value over the medium to long term
(5)The Plan^* must be fair and just and encourage the utmost efforts regarding compliance
(6)The Plan^* and its determination process should ensure both transparency and reasonableness

*The Plan is a performance-linked share-based remuneration

Remuneration System

The remuneration system for Executive Directors is comprised of three categories: "fixed remuneration," which is determined by the rank and previous year's evaluation; "short-term incentive (bonus in cash)," which varies in accordance with the rate of achievement of the targets in the annual management plans; and "long-term incentive (performance-linked share-based remuneration)," which is provided to emphasize sustainable corporate growth and linkage with capital markets. The remuneration system for Non-Executive Directors is comprised of "fixed remuneration".With respect to long-term incentives, from the perspective of maximizing sustainable growth and corporate value, which is the Company's goal, the Company has increased the ratio of stock-based compensation to an industry-leading level, a structure that will further strengthen the linkage between management compensation and shareholder return. The design of the incentives is highly effective in encouraging directors and officers to make management decisions from a medium- to long-term perspective with a constant awareness of the sustainable enhancement of corporate and shareholder value.

Fixed remuneration	Fixed remuneration is calculated by multiplying the standard amount determined based on job title and previous year's evaluation by the payment rate corresponding to the previous year's individual evaluation. The annual payment amount is divided into 12 equal parts and paid in cash every month.

Short-term incentive (bonus in cash)	Short-term incentive (hereinafter "STI") is remuneration designed to provide motivation for both target achievement and financial performance. It is evaluated from the perspectives of consolidated financial indicators, non-financial indicators on a consolidated basis, business division targets, and individual targets. To promote strict compliance by the Directors, the payment rate for "compliance evaluation" is multiplied by the base amount (total base amount for STI) calculated by summing the payment amounts for each item, and the final payment amount is determined.

Short-term incentive
(bonus in cash)

Short-term incentive (hereinafter "STI") is remuneration designed to provide motivation for both target achievement and financial performance. It is evaluated from the perspectives of consolidated financial indicators, non-financial indicators on a consolidated basis, business division targets, and individual targets. To promote strict compliance by the Directors, the payment rate for "compliance evaluation" is multiplied by the base amount (total base amount for STI) calculated by summing the payment amounts for each item, and the final payment amount is determined.

Long -term incentive （performance-linked share-based remuneration）	Long-term incentive (performance-linked share-based remuneration) is remuneration provided for the purpose of medium- to long-term corporate growth. The amount of remuneration is determined based on the performance evaluation for the fiscal year, points are awarded according to the amount of remuneration, and shares are delivered at the initially set delivery date.

Please refer to the ESG data collection for the amount of Executive Remuneration.

Remuneration Governance

Decision Process

The amount of individual remuneration for Directors is determined by the President and CEO based on the evaluation of executive directors in light of the performance of the entire company and the businesses for which they are responsible, and is determined based on the results of the evaluation and the standard amount of remuneration for each position.
The Nomination and Compensation Committee, established as an advisory body to the Board of Directors, objectively evaluates the appropriateness of the executive compensation system and the review process for decisions made by the President and CEO, and reports back to the Board of Directors. This process ensures the appropriateness, objectivity, and transparency of individual evaluations and compensation amounts for executives. Remuneration for executive directors and corporate officers is determined by the Board of Directors after consultation with the Committee.

Malus and Clawback Provision

The Company has established a malus and clawback provision that enables it to take action to reduce, freeze, demand the return of share-based remuneration if it is found that a grave violation of laws and regulations, misconduct by Executive Directors or Executive Officers occurred during the relevant fiscal year and the three preceding fiscal years.

Nomination and Compensation Committee

Believing that strengthening of independence, objectivity, and ccountability is particularly necessary regarding the nomination and remuneration of directors and other upper management, we have established the Nomination and Compensation Committee with an independent outside director serving as chairperson, and we are obtaining appropriate involvement and advice from the Committee. The Nomination and Compensation Committee consists of four independent outside directors, two non-executive directors and one internal director, and the fact that the independent outside directors account for the majority of the members increases the Committee's independence and objectivity.

Members	Chairperson: an independent outside director Committee members: three independent outside directors, President and CEO, and two non-executive directors
Objective	To ensure the appropriateness of decisions related to officer candidates nomination and compensation recommendations
Role	This Committee handles the nomination, removal as well as the compensation composition and levels for President and CEO, directors, Audit & Supervisory Board members, and executive officers considering the company business performance and other factors for objective deliberation. The Committee reports the results of such deliberation to the Board of Directors.
Number of meetings held in the fiscal year 2025	9
Main deliberation content	The Committee discussed the appointment of directors, executive officers, and Audit & Supervisory Board members, and deliberated on personnel, compensation, and evaluation systems for directors, Audit & Supervisory Board members, and executive officers. In the executive officer appointment process, the Committee got each of the new executive officer candidates to give presentations, and finally appointed three new executive officers. Regarding the evaluation of directors and executive officers, the Committee has adopted a process under which a final decision is made regarding the evaluation based on discussions of the self-reported evaluation content at the Nomination and Compensation Committee, and there have been cases where self-reported evaluation results were changed.　Director and executive officer evaluations took place twice a year instead of once a year as they used to be, so as to clarify the link to the Company performance. The Committee has deliberated cases for promotion and demotion as and when required.

SERVICE SITES

- Clicking the links above will take you to the home page of each site.