Introduction of the performance-linked stock compensation plan 'Stock Benefit Trust (BBT)'

「• For short-term performance-linked compensation, consolidated performance-linked compensation was set at 1.22 after both total ordinary profit, ordinary profit excluding the container shipping business, and net income attributable to owners of the parent exceeded their target levels during the fiscal year. The Compensation Committee deliberated on and made the final determination. • For medium- to long-term performance-linked compensation, the ratio of the company's TSR to the TOPIX growth rate over the 3 years from fiscal 2023 through fiscal 2025 exceeded 150%, and the company ranked first against peer companies by TSR, resulting in a TSR-metric payout coefficient of 1.62. The payout coefficients for the ROE and ESG metrics were each 0.05, resulting in a coefficient of 1.72 applied to the standard amount for each position. The Compensation Committee deliberated on and made the final determination.」

「The company applies a performance-linked stock compensation plan to executive officers, including those who also serve as directors, and executive officers, in order to clarify the link between compensation and share value and encourage them to contribute to improved medium- to long-term performance and increased corporate value. For directors who do not also serve as executive officers, the company applies a non-performance-linked stock compensation plan from the standpoint of retaining and securing personnel responsible for strengthening governance as a global company and promoting the sharing of interests with shareholders.」

「An additional contribution was made during the third quarter consolidated accounting period. The carrying amount and number of these treasury shares were ¥1,275 million and 1,319,700 shares, respectively, in the previous consolidated fiscal year, and ¥5,955 million and 2,167,900 shares, respectively, in the third quarter consolidated accounting period.」

「Subsequently, at the 155th Annual General Meeting of Shareholders held on 23 June 2023, the company resolved to set a limit of ¥5,200 million, including ¥2,400 million for directors, for funds to acquire the above shares for each covered period after the initial covered period. On a one-fiscal-year basis, the corresponding limits are ¥1,300 million and ¥600 million, respectively.」

「For BBT, the company decided to provide 5,414 points to 6 directors.」

「As compensation paid during the fiscal year, no bonuses were paid in light of performance in fiscal 2019 and the severe operating environment in fiscal 2020, while 1,383 shares were delivered to 2 directors under BBT.」

「Under BBT, points granted to officers are calculated using the following method, which links the calculation to the company's total shareholder return (TSR), in order to promote greater value sharing with shareholders, strengthen the incentive to improve corporate value over the medium to long term, and make the plan function more effectively. The evaluation period for the TSR ratio and ranking is 3 years, with evaluations and point grants conducted each fiscal year.」

「The company introduced this plan for the four fiscal years from the fiscal year ending March 2018 through the fiscal year ending March 2021, and established a trust whose beneficiaries would be directors and executive officers meeting the beneficiary requirements. For the initial covered period, the company contributed funds of up to ¥1,300 million, including ¥480 million for directors, to acquire shares for delivery to directors and executive officers under the plan.」

「Under the plan, points are granted to directors and executive officers in accordance with the Stock Benefit Rules for Directors and Executive Officers established by the Board of Directors, and company shares corresponding to the number of points granted are delivered upon retirement to directors and executive officers who meet the beneficiary requirements.」

「Based on a resolution of the 148th Annual General Meeting of Shareholders held on 24 June 2016, the company introduced the performance-linked stock compensation plan “Stock Benefit Trust (BBT (Board Benefit Trust))” for directors responsible for business execution and executive officers (collectively, “directors and executive officers”), with the aim of clarifying the link between their compensation and share value and encouraging them to contribute to improving the company's medium- to long-term performance and corporate value. Under the plan, points are granted to directors and executive officers in accordance with the Stock Benefit Rules for Directors and Executive Officers established by the Board of Directors, and company shares corresponding to the number of points granted are delivered upon retirement to directors and executive officers who meet the beneficiary requirements.」