After a draft proposal was deliberated by the Nomination and Remuneration Committee, the majority of which are independent External Directors and Auditors, a policy for determining the details of remuneration of individual Directors was approved by the Board of Directors. The Board of Directors has also determined that the remuneration of individual Directors for FY 2023 was in line with the determination policy mentioned above because the policy for determining the details of remuneration and the details of remuneration determined were based on the determination policy approved by the Board of Directors and were determined after they were deliberated by the Nomination and Remuneration Committee.
In order to determine the remuneration of Directors, the Company has established basic amounts for each
position, based on a design that has been developed by using data provided by specialized external
organizations as well as publicly available data and taking into consideration the remuneration levels
of industry peers and companies in other industries. More specifically, our basic policy is to ensure
that the remuneration of Directors other than External Directors functions as an incentive for them to
pursue sustainable improvement of the Company’s corporate value by adopting a remuneration package that
includes performance-based remuneration based on the financial results of the Company for each fiscal
year and non-monetary remuneration (restricted stock), as well as fixed remuneration. On the other hand,
the remuneration of External Directors consists only of fixed remuneration in view of their roles and
independence.
The remuneration of Auditors consists only of fixed remuneration (monthly fixed remuneration), which is
deliberated by the Nomination and Remuneration Committee and determined through consultation within the
Board of Auditors within the limit on their remuneration approved by the General Meeting of
Shareholders.
The fixed remuneration of the Directors of the Company shall be fixed monthly remuneration and shall be determined in accordance with each individual’s position, contribution, etc., and in comprehensive consideration of the levels of salaries and other remuneration of the employees of the Company as well as public standards.
Performance-based remuneration is paid in cash. Its amount is determined in accordance with the degree of achievement of the budget for consolidated operating income, consolidated ordinary income, and consolidated profit for each fiscal year and based on the base amount established for each position after adjusting the amount for each Director’s contribution in the fiscal year. Any performance-based remuneration is paid at the same time each year. We have chosen consolidated operating income, consolidated ordinary income, and consolidated profit as the indicators for performance-based remuneration because we recognize the importance of improving motivation to pursue profit in our core business.
Non-monetary remuneration is provided in the form of restricted stock to the Company’s Directors other
than External Directors for the purpose of providing them with an incentive to achieve sustainable
growth of the Company’s corporate value and to promote further value sharing with shareholders.
Restricted stock is granted in exchange for contribution in kind of monetary remuneration claims
determined based on the base amount established for each position and each Director’s contribution,
within the upper limit on such remuneration approved at the General Meeting of Shareholders. The timing
of the grant shall be determined as necessary by the Board of Directors in comprehensive consideration
of the composition of the Board of Directors, the purpose of restricted stock as an incentive, the
management conditions of the Company, and any other relevant matters.
In principle, the restricted period for restricted stock is the time until such Directors resign or
retire from their positions as officers or employees of the Company or its subsidiaries, as specied in
advance by the Company’s Board of Directors.
The Company has voluntarily established the Nomination and Remuneration Committee as an advisory body to ensure objectivity and transparency for the remuneration of Directors. The percentage of each component of the remuneration of Directors is determined by the Nomination and Remuneration Committee after examining the remuneration of companies of a similar scale in the same industry and considering the Company’s financial results each time such remuneration is paid.
The determination of the specific amount of remuneration of each Director shall be left to the
discretion of Representative Director & President Katsunori Sugiura by resolution of the Board of
Directors. Under the delegation, the Representative Director & President shall determine the amounts of
fixed remuneration and performance-based remuneration within the limit on such remuneration approved by
the General Meeting of Shareholders.
In order to ensure that the authority delegated as described above is exercised properly, the Company
requires the Representative Director & President to respect the deliberation results of the Nomination
and Remuneration Committee, the majority of which consists of independent External Directors and
Auditors, in determining the specific amount of remuneration of each Director.
The authority mentioned above is delegated to the Representative Director & President because the
Company has determined that he is able to determine the specific amount of remuneration of each Director
in a comprehensive manner as he is more familiar with the management conditions of the Company than
anybody else and is the most suitable person to evaluate the areas of responsibility and job
responsibilities of each Director, while examining the environment surrounding the Company and the
overall financial results of the Company from a high-level viewpoint.
Regarding restricted stock as non-monetary remuneration, the specific number of shares allotted to each
Director and other necessary matters are determined by the Board of Directors based on the deliberation
results of the Nomination and Remuneration Committee.
| Category | Total amount (millions of yen) |
Total amount by type (millions of yen) | Number of persons paid |
||
|---|---|---|---|---|---|
| Fixed remuneration | Performance-based remuneration | Non-monetary remuneration | |||
| Directors (portion of External Directors) |
234 (40) |
160 (40) |
64 (−) |
8 (−) |
7 (4) |
| Auditors (portion of External Auditors) |
34 (28) |
34 (28) |
− (−) |
− (−) |
4 (3) |
| Total (portion of external officers) |
268 (69) |
195 (69) |
64 (−) |
8 (−) |
11 (7) |
(Notes)
1 The total amount of remuneration paid to Directors excludes the portion of employee salary of Directors who concurrently serve as employees.
2
The upper limit on remuneration for Directors was resolved at 400 million yen per year (not
including salaries received as employees) at the 25th Ordinary General Meeting of Shareholders
held on May 24, 2007. At the time of the resolution, the number of Directors was 12.
In addition to the aforementioned amount of remuneration, the total amount of monetary
remuneration claims provided as restricted stock remuneration to Directors (excluding External
Directors) was resolved to be within 80 million yen per year (not including salaries received as
employees) and the total number of shares of common stock to be issued or disposed of was resolved
to be within 30,000 per year at the 40th Ordinary General Meeting of Shareholders held on May 20,
2022. At the time of the resolution, the number of Directors (excluding External Directors) was
3.
3 The upper limit on remuneration of Auditors was resolved at 50 million yen per year at the 42nd Ordinary General Meeting of Shareholders held on May 21, 2024. At the time of the resolution, the number of Auditors was 4.
4 The non-monetary remuneration consists of the shares of the Company, and the terms and conditions of allotment are as stated in “Policy for determining the contents of remuneration of individual Directors” above.