[As of June 24, 2019]
Remuneration of officers is divided into basic remuneration and bonus and is determined within the scope of remuneration resolved at the general meeting of shareholders. A fixed-amount approach is applied for basic remuneration to provide a stable standard of living, while a performance-linked remuneration system is adopted for bonuses to incorporate a certain level of incentive factor for contributions made to business results.
The General Meeting of Shareholders of the Company held on June 19, 2015 passed a resolution on the remuneration, etc. for officers, which requires that the maximum amount of remuneration for Directors (excluding those serving on the Audit and Supervisory Committee) is 300 million yen per year (excluding the employee salaries for Directors who concurrently serve as an employee) and the maximum amount of remuneration for Directors serving on the Audit and Supervisory Committee is 50 million yen per year.
Policy for determining remuneration
Directors Serving on the Audit and Supervisory Committee and other Directors are subject to different policies and processes for the determination of remuneration, etc. and separate rules apply to their basic remuneration and different bonus categories.
Basic remuneration is set by determining the monthly standard remuneration amount based on principle, position, duties, and other elements from the perspective of fairness in personnel administration while bonuses are determined under a performance-linked remuneration system in consideration of the performance and the status of execution of responsible duties for each period. No objective calculation method has been established to determine specific amounts of remuneration by position and responsibilities. The total amount of the provision for directors’ bonuses is determined based on the financial results for each fiscal year once they are largely finalized in the course of the preparation of financial statements for that year.
The amount of remuneration for each Director other than those serving on the Audit and Supervisory Committee is decided through consultation between Toshio Iwasaki, Chairman & CEO, and Hiroyuki Nemoto, President, Executive Officer, who also take into consideration the opinion of the Audit and Supervisory Committee, based on the resolution of the Board of Directors for the delegation of the relevant authority, within the scope of remuneration resolved at the general meeting of shareholders. The amount of remuneration for each Director serving on the Audit and Supervisory Committee is decided through consultation among Directors serving on the Audit and Supervisory Committee, within the scope of remuneration resolved at the general meeting of shareholders.
Restricted Shares Remuneration System
Pursuant to the resolution passed at the Ordinary General Meeting of Shareholders held on June 21, 2019, the Company introduced restricted shares remuneration system.
This system is to provide monetary remuneration claims to Directors (excluding Outside Directors and Directors serving on Audit and Supervisory Committee, hereinafter referred to as “Eligible Directors”) as remuneration in order to grant shares with restriction on transfer to them within the limit of remuneration resolved at General Meeting of Shareholders held on June 19, 2015, for the purpose of providing Eligible Directors with incentives for achieving sustained improvement in the corporate value of the Company and further promoting value sharing with shareholders.
The maximum amount of monetary remuneration claims to be provided to Eligible Directors is 60 million yen per year, and the maximum number of common shares that can be issued or disposed of is 30,000 shares per year.
As of the date of submission of this report, the Company has not paid any remuneration for the purpose of granting shares with restriction on transfer. The specific periods of payment to individual Eligible Directors and its specific allocation will be deliberated and determined at future meetings of the Board of Directors of the Company.