Composition of the Nominating and/or Compensation Committee
The Company has established the Nominating and/or Compensation Committee as a voluntary advisory committee to the Board of Directors with the aim of strengthening the Board’s independence, objectivity, and accountability. The Committee is composed of Representative Directors and Outside Directors, with a majority of members being Outside Directors and, in principle, an Independent Outside Director serving as Chairperson, thereby enhancing independence in matters relating to nominations and compensation.
Nominating and/or Compensation Committee
| Chairperson | ： | Nobuo Hanai (Outside Director) |
| Members | ： | Yoshiyuki Nakanishi (Outside Director) Nami Hamada (Outside Director) Mie Kitano (Outside Director) Teruhisa Ueda (Chairman and Representative Director) Yasunori Yamamoto (President and Representative Director) |
Activities of the Nominating and/or Compensation Committee
In accordance with the Rules of the Nominating and/or Compensation Committee, the Committee deliberates on and resolves matters relating to nominations and compensation. The specific matters reviewed in FY2025 were as follows:
| Nominations |
|
|---|---|
| Compensation |
|
Effectiveness Evaluation of the Nominating and/or Compensation Committee
In parallel with the Board effectiveness evaluation, the Company has continuously conducted a questionnaire-based effectiveness evaluation of the Nominating and/or Compensation Committee since the Committee was established in 2019.
The questionnaire focuses primarily on (1) CEO succession planning and development and (2) the design of incentives for management, and the overall results have been positive.
Policy on the Determination of Executive Compensation
The Company’s Executive Compensation Regulations set forth the procedures for determining compensation for Directors, Audit & Supervisory Board Members, and Executive Officers, as well as the structure of such compensation. In addition, the “Policy for Determining Compensation, etc., for Directors, Audit & Supervisory Board Members and Executive Officers” is established by resolution of the Board of Directors based on the deliberation and recommendations of the Nominating and/or Compensation Committee.
Within the total amount of compensation approved by the General Meeting of Shareholders, the Nominating and/or Compensation Committee, under the authority delegated to it by the Board of Directors, determines the amounts of compensation for Directors and Executive Officers, and reports the results to the Board of Directors. Compensation for Audit & Supervisory Board Members is determined through consultation among the Audit & Supervisory Board Members.
Executive Compensation Structure
Compensation for Directors (excluding Outside Directors) and Executive Officers (hereinafter, “Directors, etc.”) consists of base compensation as monetary compensation, short-term performance-linked compensation that varies according to performance, and stock compensation as non-monetary compensation, taking into account the responsibilities of Directors, etc., to manage the Company with a view to expanding performance in each fiscal year and enhancing corporate value over the medium to long term. Compensation for Outside Directors and Audit & Supervisory Board Members consists solely of base compensation and is determined in light of the level of compensation appropriate to their expected roles and responsibilities.
| Compensation Category |
Internal Directors |
Outside Directors |
Audit & Supervisory Board Members |
Notes |
|---|---|---|---|---|
| Base Compensation |
○ | ○ | ○ | Determined according to the position and role of each Director or other executive, with reference to compensation levels at peer companies (benchmark companies in the same industry and of similar size, etc.) based on surveys conducted by external professional organizations, from the perspective that compensation should be set at a level that enables the Company to secure and retain outstanding talent and should be determined on the basis of objective information. |
| Short-Term Performance- Linked Compensation |
○ | ー | ー | Determined based on a comprehensive assessment of year-on-year growth in consolidated net sales and operating profit, performance evaluations of the business areas for which Executive Officers are responsible, and individual evaluations. |
| Stock Compensation |
○ | ー | ー | Compensation designed to promote value sharing with shareholders and strengthen incentives for expanding performance and enhancing corporate value. Short-Term Performance-Linked Portion A portion of short-term performance-linked compensation is allocated in shares. Restricted stock is granted to Directors, etc., at a specified time each year, and the transfer restrictions on such shares are lifted upon the retirement from office of the relevant Director, etc. The proportion of compensation paid in shares is determined each time by the Nominating and/or Compensation Committee. Medium- to long-term performance-linked portion Shares are granted to Directors, etc., with the number of shares determined by position based on the degree of achievement of performance targets in the final year of the Medium-Term Management Plan. The indicators used to assess performance achievement are consolidated net sales and consolidated operating profit, and the number of shares granted varies within a range of 50% to 200% depending on the degree of target achievement. In addition, if a Director, etc., commits a serious violation of duties or internal regulations, a system is in place under which the right to receive shares scheduled to be granted may be forfeited, or the Company may seek repayment of an amount equivalent to the shares already granted. |
Executive Compensation (FY2025)
(Millions of yen)
| Category of Officers | Number of Officers Covered |
Monetary Compensation | Stock Compensation | Total | ||
|---|---|---|---|---|---|---|
| Base Compensation |
Short-Term Performance-Linked Compensation |
Short-Term Performance-Linked Portion |
Medium- to Long- Term Performance-Linked Portion Amount Recognized as Expense |
|||
| Directors (Internal) | 4 | 163 | 118 | 13 | 12 | 307 |
| Audit & Supervisory Board Members (Internal) | 3 | 52 | - | - | - | 52 |
| Outside Directors | 4 | 59 | - | - | - | 59 |
| Outside Audit & Supervisory Board Members | 2 | 24 | - | - | - | 24 |
| Total | 13 | 299 | 118 | 13 | 12 | 442 |
- 1. The above includes compensation for one director (excluding an Outside Director) and one Audit & Supervisory Board Member (excluding an Outside Audit & Supervisory Board Member) who retired on June 26, 2025.
- 2. Stock compensation (medium- to long-term performance-linked portion) is a performance-linked, non-monetary compensation plan under which shares are granted every three years based on the degree of achievement of performance targets in the final year of the Medium-Term Management Plan; however, for accounting purposes, the related expense must be recognized annually. The amount shown above for this compensation represents the expense recognized for the fiscal year, calculated by multiplying the number of points expected to be granted to directors (excluding Outside Directors) by the market value at the time the trust acquired the Company’s shares; actual delivery of the shares will take place after the end of the Medium-Term Management Plan.
- 3. Employee salaries for officers concurrently serving as employees are not stated because there are no applicable cases.