AKEBONO REPORT 2018

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Amount of compensation(Millions of yen)Fixed remuneration (Cash)Compensation by category (Millions of yen)Performance-based remunerationShort-term Medium-term (subscription (Cash)rights to shares)3. Future Action to Improve EffectivenessLong-term (subscription rights to shares) AKEBONO REPORT 2018 34Number of directors/Audit & Supervisory Board membersTotal Amount of Compensation Paid to Directors and Audit & Supervisory Board Members (Fiscal 2017)Board EvaluationDirectorsAudit & Supervisory Board membersTotal(Outside directors and Audit & Supervisory Board members)ScopeSurvey TimeframeQuestion TopicsAreas in good standingAreas in need of improvement1. 2.We will provide a preliminary explanation of Board proposals jointly with 3.4.Akebono evaluates the effectiveness of the Board with the aim of achieving the sustainable growth of the Group and improving corporate value. The results of this evaluation in fiscal 2016 and initiatives to further improve its effectiveness are outlined below.1. Evaluation Details2. Effectiveness Evaluation and Analysis* The above table includes one Director and one Audit & Supervisory Board Member who retired at the close of the 116th Ordinary General Meeting of Shareholders held on June 16, 2017.As of the end of fiscal 2017, the Company had 6 Directors and 5 Audit & Supervisory Board Members.* Upper limits of annual compensation for directors and Audit & Supervisory Board Members upon resolution of the Ordinary General Meeting of Shareholders (annual amount)(1) DirectorsFixed RemunerationShort-term performance-based remunerationMedium-term performance-based remunerationLong-term performance-based remuneration(2) Audit & Supervisory Fixed remuneration Board membersThe Company’s directors and auditors From mid-February to mid-March 20171. Structure of the Board of Directors2. Operation of the Board of Directors3. Duties and responsibilities of the Board of Directors (especially oversight functions)4. Support framework for outside directors5. Support framework for outside auditors6. Relationship with investors and shareholders• Structure of Board of Directors (ratio of inside and outside directors)• Matters for discussion and time allocation at the Board of Directors• Supervises the operational status of compliance activities and Internal Reporting System• Composition of the Nomination Advisory Committee and the Compensation Advisory Committee, which are voluntary bodies• Support system for Outside Directors and Audit & Supervisory Board Members• Engages in dialog with investors/shareholders167167 50 50217217 42 42– – – – – – – – ¥300 million¥120 million (excluding outside directors)¥60 million (excluding outside directors)¥120 million (excluding outside directors)¥60 millionThrough a review of the organizational structure, we will seek a substantive debate on the sales, technology development, and product strategies at the Board of Directors meeting. We will routinely review and discuss the progress of the midterm business plan.Outside Directors and Audit & Supervisory Board Members and provide more venues for exchanging views between Outside Directors and Audit & Supervisory Board Members about Board proposals to strengthen cooperation between them.Regarding training of the CEO and management successor planning, “human resource discovery and development, and training plan” is discussed at the Director Nomination Advisory Committee. The results of this discussion will be reported to the Board of Directors.The method of determining compensation of senior management, directors and executive officers, will be further discussed at the Board of Directors meeting taking into account the results of the review of the “Evaluation method for determining compensation and introduction of a stock compensation program” by the Director Compensation Advisory Committee.– – – – • More time to discuss sales strategy, technology development strategy, and future vision, and progress made toward their achievement• CEO and management succession planning• Method for determining compensation for senior management, directors and executive officers 7 613 6