Compensation For Officers

Policy and procedure to decide the amount and the calculation method of compensations for Officers

・Directors’ compensation

The Company has established a compensation system for Directors that provides them with incentives to contribute to the sustainable growth of the Company and improvement of corporate value, within the compensation range (within 800 million yen per year) approved at the 59th Ordinary General Meeting of Shareholders held on June 21, 2013. It is the Company’s basic policy to ensure fairness and transparency in determining compensation for Directors by respecting the opinions of the Nominating and Compensation Committee. Based on the policy, the Company will revise the executive compensation system by increasing the percentage of variable compensation introducing restricted share compensation starting in the fiscal year ending December 31, 2019, as described below.

Type of compensation, etc. Details of compensation, etc. Form of payment
Fixed compensation Basic compensation (single fiscal year) Basic compensation shall be determined by the Board of Directors based on the range of compensation amounts set according to grades, considering the market standard and inflation rate. Money
Variable compensation Performance-linked bonus (single fiscal year) In order to promote “business management system based on product category” which is an important target under the AGP2020 Action Plan, compensation shall be calculated in accordance with the level of achievement of quantitative and qualitative targets and determined by the Board of Directors. Evaluation of the quantitative target shall take into account the achievement rate and year-on-year growth rate of net sales and operating income ratio of the division the Director is in charge of, according to the individual’s role. Evaluation of the qualitative targets shall take into account the achievement rate of the targets set by each individual. If the level of achievement of quantitative and qualitative targets is below the level set by the Board of Directors, the performance-linked bonus shall not be paid. Money
Restricted share compensation (medium- to long- term) The Restricted Share Compensation Plan shall be introduced from the fiscal year ending December 31, 2019, in order for Directors to further share benefits with shareholders and provide them with incentives to contribute to the sustainable growth of the Company and improvement of corporate value. The annual amount of compensation shall be allotted in advance as restricted share compensation. The Company shall determine the number of Restricted Shares for which the transfer restriction is released, in accordance with the achievement rate of net sales and operating income ratio targets for the fiscal year in which Restricted Shares are allotted. If the target achievement rate is below the level set by the Board of Directors, the Company will acquire all of the shares without consideration. The Restricted Period shall be between three to five years. Shares

・Audit & Supervisory Board MGembers’ compensation

Within the compensation-range( totally 80 million yen per year) resolved at 52nd Ordinary General Meeting of Shareholders held on June 23, 2006, we decide each member’s compensation based on the Compensation Payment Standard for Audit & Supervisory Board Members.

Total Compensation for Officers

Total
(Million Yen)
Total Figure per Classification(Million Yen) Number of Persons
Fixed Performance-Based Share Remunaration-Type Share Options
Directors
(excluding Outside Directors)
319 243 75 8
Outside Directors 38 38 5
Audit & Supervisory Board Members (Inside) 24 24 2
Audit & Supervisory Board Members (Outside) 12 12 3

Director whose Total Amount of Compensation is 100 million yen or more

Name Position Total
(Million Yen)
Total Figure per Classification(Million Yen)
Fixed Performance-Based Share Remunaration
-Type Share Options
Motoi Oyama Chairman and CEO, Representative Director 114 63 50