Revision of Stock-based Remuneration System as Part of Officer Remuneration

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and CEO: Masayuki Hyodo hereinafter the “Company”) passed a resolution to revise the stock-based remuneration system of the Company in the Board of Directors meeting as follows. This revision will take effect subject to the approval of the agenda item related to the director remuneration by the shareholders in the 155th annual general meeting of shareholders to be held in June 2023.

● Purpose and outline of the revision of the share-unit remuneration system
The current stock-based remuneration system is granted based on the Company’s common shares (restricted) in an amount determined according to the Company’s stock growth rate during the three-year evaluation period. This is designed to align with the interests of shareholders to share the Company’s mid to long term corporate value. Now, the Company has determined to revise the stock-based remuneration system as detailed below, in order to further promote efforts to increase corporate value from a mid- to long-term perspective and contribute in solving key social issues by ensuring that the scheme is more closely linked with non-financial indicators related to the environment and society aspect, thereby increasing the awareness of the Company’s commitment to the sophistication of sustainability management.

<Addition of non-financial indicators>
In addition to the Company’s stock growth rate during the three-year evaluation period, the following three non-financial indicators will be added to the evaluation indicators for the stock-basedremuneration system: “Response to Climate Change,” “More Active Involvement of Women in Business” and “Employee Engagement.”

● Calculation of the Company’s common shares following the revision of the share-unit remuneration plan
Calculation of the number of the Company’s common shares based on the aforementioned revision is as follows.
Before revision: Standard number of granted shares (*1) x Stock growth rate (0%-150%)
After revision: Standard number of granted shares x Stock growth rate (0%-150%) x non-financial indicator (80%-120%)
(*1) Number of shares determined by the Company’s Board of Directors for each applicable officer

(Reference)
In addition to the above, the calculation of the Company’s stock growth rate will also be revised.
In the current calculation, the Company’s stock growth rate is calculated by using Total Shareholder Return (*2), adding dividends to the Company’s stock price. However, in order to ensure that it is better linked with the Company’s stock price, the calculation of the Company’s stock growth rate will be revised to exclude the addition of dividends as described below.

(*2) Total Shareholder Return indicates （Average Stock Price in the  month of termination of evaluation period＋Total amount of dividends during the evaluation period)/(Average Stock Price in month of commencement of evaluation period)

Executive remuneration plan (No change)