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Corporate GovernanceRemuneration of Officers

Policy for the Remuneration of Directors, Executive Officers

  • The Nomination and Remuneration Advisory Committee will discuss the remuneration of Directors and Executive Officers, and report to the Board based on the following policy.
    The Committee will consider levels of the remuneration and linkage with performance by comparing them objectively with officers' remuneration survey data of an external research body, and incorporate findings in its report to the Board of Directors.

<Directors excluding outside directors, executive officers>

  1. Remuneration will be linked to corporate value in the medium to long term, and shall encourage the sharing of value with shareholders.
  2. Remuneration must be on levels commensurate with the roles and responsibilities, and shall emphasize linkage with business performance.
  3. Remuneration will comprise the Basic Remuneration, the Yearly Bonus based on the achievement of targets for individual fiscal year, and the Performance-based Stock Compensation linked to the achievement of the major performance indicators set in the mid-term management plan as a medium to long term incentives.

<Outside Directors>

Remuneration will comprise exclusively of the Basic Remuneration, as the roles of monitoring the management and execution of business objectively.

Incentives for Enhancing Corporate Value and Achieving Sustained Growth

<Composition of remuneration>

  • Remuneration for Directors excluding Outside Directors shall comprise the Basic Remuneration, which is a fixed remuneration, the Yearly Bonus, which serves as a short-term incentive, and the Restricted Stock Compensation (Performance-based), which acts as a medium- to long-term incentive, as a way of encouraging management focused on achieving greater short-term consolidated performance as well as enhancing corporate value in the medium to long term. Remuneration for Outside Directors and Audit & Supervisory Board Members shall comprise exclusively of the Basic Remuneration.

<Structure of linkage with performance>

  • Performance-linked remuneration for Directors excluding Outside Directors (Yearly Bonus and Restricted Stock Compensation (Performance-based)) shall be as follows:
  • Under the Yearly Bonus system, the amount of bonus is determined based on consolidated performance indicators and individual performance evaluations (As for the Chairman of the Board and the President & CEO, only the consolidated performance indicators shall be taken into consideration).
  • Under the Restricted Stock Compensation System (Performance-based), Kirin shall lift the Restrictions on all or part of the Granted Shares, according to the degree of achievement of the indicators set by the Board of Directors including major performance indicators set in the Medium-Term Business Plan in the initial business year of the Restriction Period, at the expiry of the Restriction Period. However, with respect to a certain portion of the restricted stock to be granted, Restrictions shall be removed at the expiry of the Restricted Period as a general rule regardless of the degree of achievement of the indicators, in order to encourage Directors to hold Kirin's stock. With respect to the fiscal year 2017, while Kirin plans to change the number of shares for lifting the Restrictions at the expiry of the Restriction Period according to the degree of achievement of the indicators of ROE before amortization of goodwill, etc. and normalized EPS, which have been set as significant indicators in the current Medium-Term Business Plan, Kirin shall lift the Restrictions on 33% of the restricted stock to be granted, at the expiry of the Restricted Period as a general rule regardless of the degree of achievement of the indicators, in order to encourage Directors to hold Kirin's stock.
  • The amount of remuneration has been designed so that for the fiscal year 2017 the performance-linked remuneration (Yearly Bonus and Restricted Stock Compensation (Performance-based)) shall account for approximately 50% of the total composition of remuneration at the time of achievement of the performance targets as a general rule.

Nomination & Remuneration Advisory Committee

  • The Nomination & Remuneration Advisory Committee has been set up to deal with the nomination and remuneration of Directors, Executive Officers and Audit& Supervisory Board Members. The Nomination & Remuneration Advisory Committee is composed of five (5) Directors (two (2) Internal Directors and three (3) Outside Directors), and the Committee Chairman is appointed out of the Outside Directors. As an advisory body to the Board, the Nomination & Remuneration Advisory Committee discusses the following matters from an objective and fair perspective, and report to the Board of Directors:
  • The Nomination & Remuneration Advisory Committee was held six (6) times, and the attendance rate of its members is ninety-seven (97) percent during FY 2016.

Record of Remuneration (fiscal year 2016)

Officer classification Remuneration totals
(million yen)
Remuneration type totals (million yen)
and
Receiving officers (in numbers)
Basic remuneration Bonus
TotalReceiving officersTotalReceiving officers
Directors
(excl. Outside Directors)
38824461445
Audit & Supervisory Board Members
(excl. Outside Audit & Supervisory Board Members)
83692142
External Officers Outside Directors4944554
Outside Audit & Supervisory Board Members 3935433
Total5603931716614

Note:

  1. Employee salaries are not paid to the Directors and the Audit & Supervisory Board Members.
  2. As approved at the 164th Annual Meeting of Shareholders (March 28, 2003), the limit for the monthly basic remuneration for Directors (incl. Outside Directors) is 50 million yen.
  3. As approved at the 167th Annual Meeting of Shareholders (March 30, 2006), the limit for the monthly basic remuneration for Audit & Supervisory Board Members (incl. Outside Audit & Supervisory Board Members) is 9 million yen.
  4. Bonuses are as per the resolution at the 178th general shareholders' meeting held on March 30, 2017.
  5. Officers receiving the basic remuneration include the following three (3): the Director, the Ourside Director, and the Outside Audit & Supervisory Board Member who retired on March 30, 2016

Remuneration totals by officer (fiscal year 2016)

Name Officer
classification
Remuneration
totals (million yen)
Remuneration type (million yen)
Basic remuneration Bonus
Yoshinori IsozakiPresident & CEO 1487870

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