AKEBONO REPORT 2015

57/64

The Company has formulated a basic policy for determiningthe compensation for directors and Audit & Supervisory Boardmembers as follows:1. Acquire and develop talented human resources2. Motivate them to continuously improve corporateperformance and value3. Maintain a high level of fairness and rationalityTo maintain an objective and fair compensation system fordirectors we have established a Director CompensationCommittee which reviews the basic matters relating to directorcompensation. Based on the results of this review the amountof compensation for each director is determined at the Boardof Directors’ meeting within the limit of the total amountapproved by the Ordinary General Meeting of Shareholders.Compensation for directors (excluding outside directors)consists of fixed remuneration and performance-basedremuneration. The fixed portion is basic compensation forduties and is based on positions. The total amount of fixedremuneration must be approved by the Ordinary GeneralMeeting of Shareholders.The performance-based portion is determined based on theperformance of the Company and individual directors in thepreceding fiscal year. The upper limit for performance-basedremuneration is set at 100% of the fixed portion. Of thisamount 40% (cash) may be provided as short-termperformance-based remuneration; 20% (subscription rights toshares) as medium-term performance-based remuneration; and40% (subscription rights to shares) as long-term performancebasedremuneration.The compensation for Outside Directors consists of fixedremuneration only.The compensation for each Audit & Supervisory Boardmember is determined through discussion by the Audit &Supervisory Board and set within limits approved by theOrdinary General Meeting of Shareholders.Corporate InformationCompensationBasic Policy for Determining Compensation Paid to Directors and Audit & Supervisory Board MembersNotes: 1. Including one director who retired from office upon the closing of the 113th Ordinary General Meeting of Shareholders held on June 18 2014. As of March 31 2015 thenumber of directors and Audit & Supervisory Board members was 9 and 5 respectively.2. Upper limits of annual compensation for directors and Audit & Supervisory Board members upon resolution of the Ordinary General Meeting of Shareholders:(1) Directors:Fixed remuneration: ?300 millionPerformance-based remuneration*Short-term performance-based remuneration: ?120 millionMedium-term performance-based remuneration: ?60 millionLong-term performance-based remuneration: ?120 million(2) Audit & Supervisory Board members:Fixed remuneration: ?60 million* Excluding outside directorsTotal Amount of Compensation Paid to Directors and Audit & Supervisory Board Members (Fiscal 2014)Amount ofcompensation(Millions of yen)Compensation by category (millions of yen)Number of directors/Audit & SupervisoryBoard membersFixed remuneration(Cash)Performance-based remunerationShort-term(Cash)Medium-term(Subscription Rightsto Shares)Long-term(Subscription Rightsto Shares)Directors 351 261 31 20 39 10Audit & Supervisory Boardmembers56 56 ? ? ? 5Total 407 317 31 20 39 15(Outside Directors andAudit & Supervisory BoardMembers)(41) (41) (?) (?) (?) (6)