TAIYO YUDEN

Remuneration Policy for Corporate Officers

Policy to determine the remuneration paid to Corporate Officers

  1. The Company shall provide remuneration that emphasizes the linkage with financial results and medium- to long-term corporate value, to share the same value with shareholders.

  2. Remuneration shall be set at levels that can attract and retain excellent human resources with global competitiveness.

  3. Remuneration shall emphasize transparency and fairness to be able to fulfill accountability.

Process to determine remuneration paid to Corporate Officers and content of remuneration

In order to ensure the transparency and fairness of the process to determine remuneration for Officers, a Remuneration Committee has been established as an advisory panel to the Board of Directors.

The Remuneration Committee is composed of the President and CEO, Outside Directors, and an Audit & Supervisory Board Member and is chaired by an Independent Outside Director to ensure the objectivity of deliberations. It deliberates and reports on matters pertaining to remuneration for Officers such as remuneration policy, plan, calculation methods, and specific remuneration content of individual Officers.

After the Remuneration Committee has deliberated and reported, specific remunerations for Directors are deliberated at the Board of Directors meeting, and specific remunerations for Audit & Supervisory Board Members are discussed at the Audit & Supervisory Board meeting, within the limits of remunerations approved at the General Meeting of Shareholders, and with the amount of remunerations calculated based on rules and regulations established by the Company.

Composition of remuneration by position

Executive Directors
  • As Executive Directors are expected to achieve performance targets through business execution, their remuneration consists of "basic remuneration," "performance-based bonus," and "stock compensation-type stock options."
  • If they achieve the targets underlying "performance-based bonus," their remuneration will consist of 40% of basic remuneration, 40% of performance-based bonus, and 20% of stock remuneration.
Outside Directors In the interest of maintaining independence, Outside Directors receive only "basic remuneration," with no performance-based remuneration.
Audit & Supervisory Board Members In the interest of promoting audits of legality, Audit & Supervisory Board Members receive only "basic remuneration."

Remuneration structure

Type of remuneration Remuneration item Description Form of payment
Basic remuneration Fixed remuneration
  • Levels are determined in consideration of, among others, the economic climate and the growth potential of the Company.
  • Fixed remuneration based on roles and responsibilities.
Cash
Performance-based bonus Performance-based remuneration (Single year)
  • Given the responsibility of Executive Directors for meeting Group performance targets each year, consolidated profit is chosen as the relevant performance indicator to establish a clearer linkage between factor contributing to the enhancement of corporate/shareholder value and remuneration.
  • The amount of bonus for each position and rank is determined based on annual performance for the range of consolidated profit from zero yen (¥0) to the target amount set forth in the Medium-term Management Plan.
  • The amount of bonus for individual Directors is determined by multiplying the bonus amount for each position/rank by evaluation factor, which is determined based on performance evaluation of the business units in their charge and evaluation of strategic behavior on an individual basis. This is designed to raise motivation for the execution of business strategies.
Cash
Stock compensation-type stock options Stock remuneration (Medium- to long-term)
  • Introduced as an incentive toward medium- to long-term enhancement of corporate value, and to nurture shared value with shareholders and Directors' awareness to stock price.
  • The number of share acquisition rights granted to each Director is determined based on his or her position and rank.
Shares (Share acquisition rights)