Officers and Compensation

Our Board of Directors selects candidates for director without regard to age, gender, or nationality, choosing people who will contribute to our sustained growth and to raising our corporate value over the medium to long term. In doing so, the Board weighs the balance of knowledge, experience, and ability called for by each of our businesses, and keeps the Board an appropriate size within the number stipulated in our Articles of Incorporation.

Four of the ten directors currently serving are independent outside directors, more than one third of the Board, and two of the four are women. They bring a range of backgrounds, including experience in government administration and in corporate management, as well as an attorney and a certified public accountant.

We have not established our own criteria for judging independence. Instead, we apply the criteria set by the Tokyo Stock Exchange, appointing as independent outside directors those who are unlikely to have any conflict of interest with general shareholders. Each of them has been registered with the Exchange as an independent officer as defined by the Tokyo Stock Exchange.

We provide directors with the training and information they need to fulfill their roles and responsibilities properly, drawing on outside training providers where appropriate.

Newly appointed directors receive lectures and training from specialists in law and corporate governance, and after taking office they attend regular training on changes in legislation and on management issues.

Our basic policy on officer remuneration is to discourage excessive risk-taking while strengthening officers’ motivation to contribute to higher corporate value over the medium to long term and to sustained growth. Moreover, we keep the process for determining remuneration objective and transparent, and we will continue to review our approach in light of future changes in legislation and wider social trends in order to make remuneration more appropriate.

Directors (excluding directors who are Audit and Supervisory Committee members)

Remuneration consists of base remuneration, a fixed amount paid monthly; director bonuses, which are performance-linked; and share-based remuneration. Base remuneration and director bonuses are monetary remuneration, while share-based remuneration is non-monetary.

Directors who are Audit and Supervisory Committee members

To ensure their independence from management, these directors receive base remuneration only and are not eligible for director bonuses or share-based remuneration.

Director bonuses

These are intended to strengthen the incentive for each year’s efforts toward achieving the Medium-Term Management Plan, and use consolidated operating profit (before deduction of performance-linked remuneration) as the indicator.

Share-based remuneration

This is intended to raise corporate value over the medium to long term, and uses profit attributable to owners of parent as the indicator.

Base remuneration (fixed remuneration)

For base remuneration, the Board of Directors passed a resolution to delegate to the President the determination of the specific amount of individual remuneration for directors (excluding directors who are Audit and Supervisory Committee members). Based on the delegation, the President makes these decisions in light of the recommendations of the Nomination and Remuneration Advisory Committee.

The delegated authority covers the determination of each director’s base remuneration. It was delegated because the President is best positioned to evaluate individual directors while overseeing the performance of the Company as a whole.

Moreover, to ensure that the President exercises this authority appropriately, the Board of Directors consults with the Nomination and Remuneration Advisory Committee on draft proposals, and the President determines individual remuneration in light of the Committee’s recommendations, within the total approved by the General Meeting of Shareholders.

Director bonuses (performance-linked remuneration)

Director bonuses are paid to directors (excluding directors who are Audit and Supervisory Committee members) in accordance with the Director Bonus Regulations, which were established by resolution of the Board of Directors following consultation with, and a recommendation from, the Nomination and Remuneration Advisory Committee. Payments are made up to the maximum approved by the General Meeting of Shareholders.

Share-based remuneration (non-monetary remuneration)

For share-based remuneration, points are granted to directors (excluding directors who do not hold executive authority) in accordance with the Share Delivery Regulations, which were established by resolution of the Board of Directors following consultation with, and a recommendation from, the Nomination and Remuneration Advisory Committee. Points are granted up to the maximum approved by the General Meeting of Shareholders separately from monetary remuneration.

Directors who are Audit and Supervisory Committee members

The total remuneration and the individual amounts for directors who are Audit and Supervisory Committee members are determined through discussion among the Audit and Supervisory Committee members, within the total approved by the General Meeting of Shareholders.

FY2026

Reference: Maximum remuneration approved by the General Meeting of Shareholders

・Base remuneration for directors (excluding Audit and Supervisory Committee members): up to 300 million yen per year

・Director bonuses for directors (excluding Audit and Supervisory Committee members): up to 200 million yen per year

・Share-based remuneration (eligible directors): up to 245 million yen in total for each period of five fiscal years

・Base remuneration for directors who are Audit and Supervisory Committee members: up to 80 million yen per year