Overview of Executive Remuneration Plan


Remuneration of Directors (excluding Outside Directors) and Executive Officers

  1. Objective

    The Company has formulated its executive remuneration plan according to the following basic policy to realize a plan with the aim of reinforcing our group’s governance and increasing our corporate value over medium- to long-term, and promoting the Company’s sustainable growth in link with our management strategy.

    • By appropriately setting the ratio of fixed remuneration (monthly remuneration) and variable remuneration (performance-linked bonus which is linked to short-term results and sharebased remuneration which is linked to medium- to long-term results and shareholder value), the plan shall function as a robust incentive for achieving sustainable growth.
    • By reinforcing the relation between our group’s management strategy and performancelinked bonus, the plan shall promote the execution of duties that coincide with our management strategy and offer strong motivation for achieving specific business objectives.
    • By further reinforcing the interrelation with shareholder value regarding the stock remuneration plan, the plan shall promote efforts to improve our corporate value over medium- to long term and create greater shared values with our shareholders.
  2. Remuneration composition ratio and remuneration level

    In order to increase incentives for enhancing company performance based on management strategies as well as our corporate value over medium- to long-term, the Company has appropriately set the ratio of fixed remuneration and variable remuneration. Furthermore, the Company has set an appropriate remuneration level with reference to objective remuneration market survey data provided by external specialized agencies and in light of the Company’s business environment.

    < Remuneration composition ratio (image) >
    Remuneration composition ratio (image)
    • The aforesaid chart is an image calculated based on a certain level of company performance and stock price, and the above ratios will change according to fluctuations in such company performance and stock price.
    • The Chairman of the Board of Directors is not eligible for the performance-linked bonus.

Remuneration of Outside Directors and Audit & Supervisory BoardMembers

The remuneration of Outside Directors and Audit & Supervisory Board Members consists only of “monthly remuneration” in light of their independence and professional roles, and a fixed amount is paid on a monthly basis.

Remuneration Governance

The Company has established, as the advisory body of the Board of Directors, the Nomination and Remuneration Advisory Committee (chairperson: Outside Director) in which a majority of its members is Outside Directors. The structure and the level of remuneration of Directors and the total amount of remuneration of Audit & Supervisory Board Members are deliberated in the Nomination and Remuneration Advisory Committee and the results thereof are reported to the Board of Directors meeting as a part of our efforts to further enhance transparency and objectivity.

[Overall image of executive remuneration plan]
(●, ○, ◎ indicate the persons eligible for each type of remuneration, etc.)
Type of remuneration, etc. Description of remuneration, etc. Eligibility
Directors/ Executive Officers
(Note 1)
Chairman of the Board of Directors Outside Directors Audit & Supervisory Board Members
Fixed Monthly remuneration
(Note 2)
Fixed amount according to their position is paid on a monthly basis.
Variable Performance-Linked Bonus
(Note 3)
From the perspective of reinforcing the relation between our group’s management strategy and performance-linked bonus, a certain rate of “consolidated net income” and “basic profit cash flow” – which are adopted as the performance management index to be emphasized in our mediumterm management plan – is equivalent to the total amount to be paid, and it is distributed according to their position and personal evaluation.
Restricted Stock-Based Remuneration
(Notes 2, 4)
In principle, the Company’s common shares subject to transfer restriction are granted each year.
In order to realize the sharing of shareholder value, which is one objective of introducing the plan, over medium- to long term, the restriction period is set from the date that such shares are allotted until the date that an eligible person resign or retire from all his/her position as the Company’s Director, Executive Officer or any other position determined by the Board of Directors.
Performance Share Unit-Based Remuneration
(Notes 2, 4)
In principle, the Company’s common shares in number determined according to the Company’s stock growth rate (calculated by dividing the Company’s TSR (Total Shareholder Return) by the growth rate of TOPIX (Tokyo Stock Exchange Stock Price Index) during the evaluation period) in a 3-year’s evaluation period are granted each year upon conclusion of such evaluation period.

(Note 1) Excluding the Chairman of the Board of Directors and Outside Directors.
(Note 2) The total amount of remuneration of Directors (excluding bonuses) was resolved to be an annual amount of 1.2 billion yen or less (including an annual amount of 60 million yen or less for Outside Directors) at the 145th Ordinary General Meeting of Shareholders held on June 21, 2013. For the total amount of remuneration of Outside Directors, however, it was subsequently resolved to be amended from an annual amount of 60 million yen or less to an annual amount of 100 million yen or less at the 150th Ordinary General Meeting of Shareholders held on June 22, 2018. In addition, it was resolved at the 150th Ordinary General Meeting of Shareholders to provide monetary remuneration receivables to Directors (excluding Outside Directors) in order to offer restricted stock-based remuneration and performance share unit-based remuneration as a substitute for stock options (new share acquisition rights in the form of stock options and new share acquisition rights in the form of stock options for a stock-linked compensation plan) within the range of the aforementioned total amount of remuneration. The amount of the monetary remuneration receivables was also resolved to be an annual amount of 130 million yen or less for restricted stock-based remuneration and an annual amount of 430 million yen or less for performance share unit-based remuneration (total annual amount of 560 million yen or less). Consequently, the upper limit of the “monthly remuneration,” “restricted stock-based remuneration” and “performance share unit-based remuneration” of Directors (indicated with ● above) has been an annual amount of 1.2 billion yen (including an annual amount of 100 million yen for Outside Directors), and the amount of remuneration to be actually paid to the respective Directors has been resolved by the Board of Directors based on the aforesaid upper limit. Furthermore, with regard to the “monthly remuneration” of Audit & Supervisory Board Members (indicated with ○ above), the upper limit has been resolved to be an annual amount of 180 million yen in the 145th Ordinary General Meeting of Shareholders held on June 21, 2013. The amount of remuneration to be paid to the respective Audit & Supervisory board members has been decided based on the aforesaid upper limit upon consultation among the Audit & Supervisory Board Members.
(Note 3) As the “performance-linked bonus” of Directors (indicated with ◎ above) is highly linked to performance, it is paid upon resolution of the General Meeting of Shareholders each year. The Chairman of the Board of Directors and Outside Directors are not eligible for the performance-linked bonus.
(Note 4) The upper limits of the total amount of monetary remuneration receivables and the total number of common shares to be issued or disposed for granting the share-based remuneration are as follows: The timing of granting the Company’s common shares as the initial “performance share unit-based remuneration” is upon conclusion of the initial Evaluation Period (around August 2021).

Directors (excluding Outside Directors) and Executive Officers Directors (excluding Outside Directors) among those indicated on the left
Total amount of monetary remuneration receivables Total number of Company’s common shares Total amount of monetary remuneration receivables Total number of Company’s common shares
Restricted Stock-Based Remuneration Annual amount of 520 million yen or less 490,000 shares or less per year Annual amount of 130 million yen or less 120,000 shares or less per year
Performance Share Unit-Based Remuneration Annual amount of 1,700 million yen or less 730,000 shares or less per year Annual amount of 430 million yen or less 180,000 shares or less per year
Total Annual amount of 2,220 million yen or less 1,220,000 shares or less per year Annual amount of 560 million yen or less 300,000 shares or less per year

■ The “total amount of monetary remuneration receivables” and “total number of Company’s common shares” (upper limit) in the foregoing “performance share unit-based remuneration” have been set upon anticipating a case where the total number of the Company’s common shares (and the total amount of monetary remuneration receivables to be consequently paid) will be maximum in light of the Company’s stock growth rate during the 3-year’s evaluation period and other factors.

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