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Officer compensation, etc.

1. Total amount of compensation classified by position, total amount classified by compensation type, and the number of officers eligible for compensation

FY2016

Position Total amount of compensation (Millions of yen) Total amount classified by compensation type (Millions of yen) Number of eligible officers
Basic compensation Bonuses Stock based remuneration Stock option
Directors (Excluding Audit Committee Members and Outside Directors) 160 123 25 12 - 5
Directors elected as Audit Committee Members (Excluding Outside Directors) 21 21 - - - 1
Outside Directors 42 42 - - - 5

Notes:

  1. The stock-based remuneration for Directors stated above represents the total amount of stock-based remuneration granted during the fiscal year ended March 31, 2017 to Directors who satisfied beneficiary requirements for the fiscal year ended March 31, 2016, and who were in office as of March 31, 2016 (however, excluding the amount equivalent to stock-based remuneration corresponding to the vesting period, which was recorded as expenses to be recognized in the fiscal year ended March 31, 2016), and the amount equivalent to the stock-based remuneration scheduled to be granted for the fiscal year ended March 31, 2017 to Directors in office as of March 31, 2017, which was recorded as expenses in the fiscal year ended March 31, 2017.
  2. In addition to the aforementioned items, the salaries (including bonuses) for Directors who serve concurrently as employees (2 persons) amount to 19 million yen.
  3. The number of eligible officers stated above includes one Director who retired at the conclusion of the 90th Ordinary General Meeting of Shareholders held on June 28, 2016.
  4. No Director of the Company received 100 million yen or more in the total consolidated compensation (including compensation for Director of its principal consolidated subsidiaries).
  5. The maximum amount of officer compensation (however, excluding the amount equivalent to salaries for Directors who serve concurrently as employees) determined at the resolution at the 89th Ordinary General Meeting of Shareholders is 260 million yen per year (including 45 million yen per year for Outside Directors) for Directors (excluding Directors who are elected as Audit Committee Members) and 60 million yen per year for Directors who are elected as Audit Committee Members.

2. Nature and method of resolution for determination of officer compensation amounts and method of computation thereof

The Company has the following policy for determining the amount of compensation for officers and the method of calculation to determine the amount.

Directors’ (Excluding Directors elected as Audit Committee Members. The same shall apply in i) below.) compensation is discussed and assessed by the Compensation Committee, which is an advisory body to the Board of Directors, taking into account the Directors’ compensation scheme, compensation packages and levels, distribution balance and other aspects. On receipt of the recommendations of the Compensation Committee, the final amount is determined within the range of a resolution made at the general meeting of shareholders.

Basic policy:

  1. Directors’ compensation
    The basic policy regarding Directors’ compensation is set out below.
    1. Directors’ compensation scheme and compensation packages should be designed to raise Directors’ motivation to contribute to the fulfillment of management goals and sustainable growth in corporate value.
    2. Directors' compensation scheme and compensation packages should be designed to attract and retain diverse personnel with the right capabilities and who are sought after as officers of global corporations.
    3. We ensure the validity and objectivity of decision-making procedures and distribution balance of Directors’ compensation.

      Under the policy stated above, the amount of Directors’ compensation is determined with reference to information, gained from external research organizations, concerning the rates of remuneration for similar posts, and also in consideration of the balance between a fixed amount of compensation based on the Director’s responsibilities and a floating amount closely tied to the Company’s business performance for each fiscal year. By this method, the Company principally aims to make efficient use of the Directors’ compensation scheme to provide them with incentives to enhance the Company’s performance for each fiscal year and achieve medium- to long-term maximization of corporate value. The compensation package contains a bonus linked to the Company’s performance and the amount of bonus equals 40 percent of an Executive Director’s annual salary, which is used as the basis for his or her compensation package. For the compensation scheme, we have adopted an institutional design that allows the relevant Directors to share awareness of profits with shareholders and to be motived to perform management based on awareness of performance and stock value from medium- and long-term viewpoints. The bonus is comprised of monetary remuneration (bonuses, an amount equivalent to 30 percent of a fixed amount of compensation) and non-monetary remuneration (stock based remuneration, an amount equivalent to 30 percent of a fixed amount of compensation) based on an incentive plan using trusts. Each Director is evaluated in light of the level of distribution of surpluses for given fiscal years targeted for evaluation, the degree of achievement of numerical targets in relation to management indexes, the degree of achievement in relation to management indexes including non-financial viewpoints established by each Directors in advance, etc.

  2. Compensation of Directors elected as Audit Committee Members
    Focusing primarily upon effective auditing of execution of the Company’s duties, compensation of the Directors elected as Audit Committee Members in the form of fixed fees has been determined within the amount resolved at the general meeting of shareholders based on consultation with the Audit Committee Members. This has been done so that the Audit & Supervisor Board Members will be able to fulfill their duties independent of the influence of persons who execute businesses.

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