Governance

The Group will establish effective governance frameworks to ensure the transparency, objectivity, and fairness of the management of the companies and earn society’s trust everywhere it operates. The Board of Directors recognizes fiduciary responsibilities to all stakeholders, including shareholders and investors, and supervises the Group’s overall management by taking responsibility for the Company’s sustainable growth and maximization of mid- to long-term shareholder value (MSV) through the appropriate exercise its authority.

Remuneration and Other Matters Concerning Directors and Executive Officers

Compensation decision-making policy for Officers

At our Company, the Compensation　Committee, chaired by an Independent　Director, determines the level of total　compensation amount and its composition　for Directors and Executive Officers. For Global Key Persons (GKPs), who are the key management personnel of partner companies, the decision-making process for the compensation amount is supervised through reports from the Co-Presidents. The Compensation Committee deliberates on and determines the specific level and composition of compensations in a fair and transparent manner based on the “Compensation Philosophy” and the “Design Policies for the Compensation of the Representative Executive Officer & Co-Presidents” (see page 112) set forth by the Compensation Committee, by gathering and analyzing objective information such as the social circumstances, comparison of compensations with comparable companies, the market compensation standard, and other factors considering advice from external advisors.

Remuneration Philosophy

Overarching Principle

In order to implement ”Maximization of Shareholder Value” (MSV), to build a remuneration system that is transparent and satisfactory and to continue to provide appropriate motivation, incentives, etc., to key executives by implementing individual treatment based on the system.

Guiding Principles

To be able to attract and keep management talent that excels at practicing MSV.

To be able to continuously provide motivation so that maximum potential can be encouraged even under changing environments.

To function effectively and in harmony with the current state of business development, level of maturity of organizational systems, organizational values, and the community.

Design Policies for the Remuneration of the Representative Executive Officers & Co-Presidents

Remuneration that contributes to MSV

Total remuneration is commensurate with the performance of the Representative Executive Officers & Co-Presidents

A remuneration structure that promotes appropriate and decisive risk-taking

Composition of executive compensation

Composition of Directors’ compensation

Compensation for Directors (Independent Directors) who do not concurrently serve as Executive Officers consists of “Job-based Compensation,” “Allowances for Committee “Long-term Incentives.” “Long-term Incentives” are restricted stock compensation.
This is intended to promote further value sharing with shareholders toward the realization of MSV, as Directors not only supervise the Group’s management as Asset Assemblers, but also assume the role and risk-taking of making important decisions regarding the allocation of management resources entrusted to them by shareholders.

Composition of Representative Executive Officers & Co-Presidents’ compensation

For the Co-Presidents’ compensation, the optimal mix of cash and stock compensation is settled each fiscal year after determining the total amount of compensation. Specifically, the total amount of compensations for the following fiscal year is redefined each fiscal year from the ground up after a comprehensive evaluation of the performance of the Co-Presidents from both financial and non-financial perspectives of the previous fiscal year through close communication with the Co-Presidents and GKP, in addition to continuity with past compensations, market and peer benchmarking surveys, and other factors. The composition of cash and stock compensation is also reviewed each time. In this way, the compensations maximize motivation to realize MSV and incentivize further leaps forward.

Composition of Executive Officers’ compensation

Compensation for Executive Officers, excluding Representative Executive Officer & Co-Presidents, consists of “Job-based Compensation,” “Performance-linked Compensation.” and “Long-term Incentives,”The Compensation Committee decides the amount of “Performance-linked Compensation” and “Long-term Incentives” according to the evaluation by the Co-Presidents.
“Performance-linked Compensation” is a comprehensive evaluation based on a non-financial assessment in addition to a financial evaluation, in order to provide appropriate incentives through flexible and proper evaluation in a rapidly changing business environment. Non-financial assessment items are based on contributions related to governance, such as group internal controls including risk management, and achievements in diversity, equity and inclusion (DE&I), such as the creation of a highly dynamic work environment and culture for diverse human resources and human resource development.
“Long-term Incentives” are cash compensation, determined based on a comprehensive evaluation of longer-term sustainability, contribution to the overall optimization of the Group, and expectations for contributions, and paid out in thirds per fiscal year, over a three-year period.

Please see the Annual Securities Report for more information about the remuneration design processes and composition for Directors and Executive Officers.
Securities report (only Japanese)

See "Executive Compensation" for the details of executive compensation and other matters.

Policy on Director ownership of Company shares

In addition to the existing job-based compensation, we brought in long-term incentives for Directors. The aim was to create a remuneration structure that reflects the fact that Company Directors not only supervise management, but also take on long-term roles in key decision-making, including corporate acquisitions.
Long-term incentives are a restricted share compensation designed to provide Company shares equivalent to the amount determined by a ratio to the job-based compensation pre-determined based on the person’s position once a restricted share allotment agreement has been signed between the Company and the person concerned, and the ratio to the job-based compensation is increased based on the person’s position. Restricted share compensation is designed to provide incentives for Maximization of Shareholder Value by Company Directors and Executive Officers, and promote further sharing of values with shareholders.