The Company believes that it is essential to make prompt and appropriate business decisions while simultaneously ensuring the efficiency and lawfulness of management from the viewpoint of strengthening the competitiveness of the Company amid a harsh business environment. Our basic policy, therefore, is to provide an efficient organizational structure that can respond flexibly to changes in the business environment, to build fair and transparent management systems, and to enhance an effective corporate governance system that provides supervision and monitoring of management.
Reasons for selection of the current corporate governance structure
The Company believes it is possible to achieve appropriate corporate governance through the management structure described in the Overview of Corporate Governance Structure, and has selected the current structure from the viewpoint of effectively demonstrating a balance between executive functions and management supervision and auditing functions in light of the nature and scale of the business.
The total compensation limits for directors (other than Audit Committee members) and directors who are Audit Committee members were fixed by resolution of the 4th Ordinary General Meeting of Shareholders held on March 29, 2017 at JPY 500 million per year (six directors at the time of the resolution) and JPY 100 million per year (three directors who were Audit Committee members at the time of the resolution), respectively.
Furthermore, at the Board of Directors meeting held on February 14, 2019, the Company decided to introduce a new restricted stock compensation plan (the “Plan”) for directors of the Company (excluding outside directors and directors who are Audit Committee members; the same applies below) for the purposes of providing the directors with incentives to sustainably enhance the enterprise value of the Company and promote further sharing of value with all shareholders. It was subsequently decided at the 6th Ordinary General Meeting of Shareholders held on March 26, 2019 that cash compensation claims of no more than JPY 100 million per year (four directors subject to the Plan at the time of the resolution) will be paid to the directors of the Company as part of the existing cash compensation quota as in-kind contributions for the granting of restricted stock pursuant to the Plan, and that the transfer restrictions on the restricted stock will be for a period of no more than five years from the delivery of the restricted stock as determined by the Board of Directors of the Company. Members of the Audit Committee are only paid fixed compensation.
Total amount of compensation, etc. for each category of officers and each type of compensation, etc., and number of officers covered
(Notes) 1. Retirement gratuity is the amount booked in the relevant fiscal year as an expense for the accrued retirement gratuity provision.
2. The amount of restricted stock compensation is the amount booked as an expense in the relevant fiscal year for restricted stock compensation.