Policy for Determining Executive Compensation Based Primarily on Fixed Compensation

「Performance-linked and other compensation will be paid in cash, reflecting ROE, operating profit margin, operating cash flow, operating profit and ESG metrics, with the aim of increasing directors' motivation to contribute to achieving the targets of each medium-term management plan and fiscal year. To align interests with shareholders, at the beginning of the period, phantom shares equivalent to 5% of each director's fixed compensation for the period will be granted. At the end of the period, the amount paid in cash will be calculated by multiplying the total of the market value at the end of the period and dividends received during the period by a payout rate based on the degree of achievement of the metrics.」

「During the consolidated fiscal year, the Board held a total of 15 meetings (12 regular Board meetings and 3 written resolutions). In addition to routine matters stipulated in internal regulations, it discussed management with an awareness of the cost of capital and share price, disclosure of non-financial information, sustainability initiatives, the future introduction of a performance-linked compensation plan, and measures to address an aging workforce.」

「Fixed basic compensation is set at 100%.」

「As we remain in the process of rebuilding management and taking into account the voluntary relinquishment of part of fixed compensation, we have decided not to apply performance-linked compensation or other such compensation. As we remain in the process of rebuilding management and taking into account the voluntary relinquishment of part of fixed compensation, we have decided not to apply non-monetary compensation or other such compensation.」