Director Compensation Linked to Annual Performance and the Medium-Term Management Plan

「The compensation mix is determined based on the executive's position and is generally 50% fixed compensation, 30% performance-linked compensation and 20% stock compensation. The 30% performance-linked compensation consists of 20% compensation linked to annual performance and 10% compensation linked to progress toward and achievement of the medium-term management plan.」

「At a meeting of the Board of Directors held on 14 January 2022, the company reviewed its executive compensation system and resolved to introduce a restricted stock compensation plan for directors, excluding outside directors, and executive officers who do not concurrently serve as directors. The plan is intended to provide incentives for the sustained enhancement of corporate value and to promote greater value sharing with shareholders. The resolution was approved at the 191st Annual General Meeting of Shareholders held on 25 February 2022.」

「The performance-linked compensation tied to progress toward and achievement of the medium-term management plan uses a weighted-average consolidated metric comprising revenue, operating profit, ordinary profit and net income attributable to owners of the parent. The overall payout rate is determined according to the achievement ratio, based on a comparison of the annual target set in the medium-term management plan with actual results for the relevant year.」

「Compensation for inside directors consists of fixed compensation, which is a fixed amount based on position, performance-linked compensation tied to annual performance, and performance-linked compensation tied to progress toward and achievement of the medium-term management plan. The standard allocation is approximately 7:2:1. The performance-linked compensation tied to the medium-term management plan has applied since fiscal 2020.」