Officers' Compensation

Basic Policy of Officers' Compensation

The Board of Directors has the authority to determine the policy of determining the amount of compensation for directors and Audit & Supervisory Board Members of the Company or the amount of compensation thereof, and approves the amount calculated in accordance with the Company's internal regulations. The General Shareholders' Meeting held on June 29, 2004 approved the proposal of total compensation of the Audit & Supervisory Board Members should be confined to no more than JPY 60 million per year, with the amount of individual compensation to be determined through mutual consultation between the Audit & Supervisory Board Members.

Policy for determining officers' compensation

Compensation for executive directors consists of performance-based annual salary and incentive bonus, and compensation for non-executive directors consists of basic salary.
Officers' compensation is discussed by the Nomination and Compensation Committee and decided by the Board of Directors. The policy for determining each component of the officers' compensation is as follows.

Performance-based annual salary

The amount to be paid shall be determined in accordance with a comprehensive evaluation that takes into account the Company's performance and the contribution of each director, based on a compensation table which is established considering each member's responsibilities and the associated risks.

Incentive bonus

This component of compensation is paid only if a shareholder dividend is paid in the fiscal year. The amount of compensation is determined in accordance with a comprehensive evaluation that takes into account the Company's performance and the contribution of each director, based on a compensation table which is established considering each member's responsibilities and the associated risks.

Basic salary

The amount of compensation is determined based on a compensation table, which is established considering the level of other companies which is established considering the Company's business performance, the level of employee salaries, the social status of the director, his/her knowledge or experience in his/her field of expertise, and other factors. The annual amount shall not exceed JPY 20 million.

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 2021

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.