Directors Remuneration Policy

IRISO Directors Remuneration Policy is a pay structure designed to further motivate directors to improve company performance and to enhance business value in the medium-and long-term, through emphasizing the link between pay and business performance, as well as ensuring high transparency and objectivity in deciding remuneration.

Remuneration for Directors (excluding Directors who are the Audit and Supervisory Committee members and outside directors) is comprised of both a fixed monthly- pay and performance-linked remuneration, which are decided in consideration of their responsibility and duty to improve business performance and enhance business value in each fiscal year. In addition, IRISO established the Remuneration Committee on June 26, 2018 as a voluntary advisory body to the Board of Directors to increase transparency and objectivity in the payout process of variable remuneration for Directors (excluding Directors who are the Audit and Supervisory Committee members and outside directors). The Committee consists of three Independent Outside Directors (the Committee is chaired by one of them) and two inside directors.

Remuneration for Directors who are the Audit and Supervisory Committee members and Outside Directors is only the fixed monthly pay in consideration of their roles and responsibilities for conducting group-wide audits.

To decide remuneration for an individual Director, the Remuneration Committee considers the drafting of executive contracts from multiple points of view, including consistency with the Directors Remuneration Policy, and the Board of Directors accepts the report of the Remuneration Committee and follows its decision.

Remuneration for Directors

Remuneration for Directors (excluding Directors who are the Audit Committee members) is decided within the upper limit of remuneration, which was approved at the 52nd Ordinary General Meeting of Shareholders held on June 26, 2018 (total amount not exceeding 360 million yen per year).

The amount of remuneration for each Director (excluding Directors who are the Audit Committee members and Outside Directors) is decided by the Remuneration Committee within the upper limit of remuneration, which was also approved at the General Meeting of Shareholders.

The directors of the company (excluding those who are Audit and Supervisory Committee members and outside directors) receive variable compensation, which aligns their rewards with both company performance and their performance outcomes, separately from their fixed monthly compensation.

Remuneration for Directors who are the Audit and Supervisory Committee members

Remuneration for Directors who are the Audit and Supervisory Committee members is decided within the upper limit of remuneration approved at the 52nd Ordinary General Meeting of Shareholders held on June 26, 2018 (total amount not exceeding 80 million yen per year). The amount of remuneration for each Director who is the Audit Committee member is decided within the upper remuneration limit, which was approved at the General Meeting of Shareholders through consultation with Directors who are the Audit Committee members.

Performance-linked remuneration for Directors (excluding Directors who are the Audit and Supervisory Committee members and Outside Directors)

The directors of the company (excluding those who are Audit and Supervisory Committee members and outside directors) receive variable compensation, which aligns their rewards with both company performance and their performance outcomes, separately from their fixed monthly compensation.

This compensation scheme is designed to motivate the directors to achieve their individual performance goals, improve the company’s business performance, and increase corporate value. The following performance indicators are set as targets for each fiscal year: consolidated net sales, consolidated operating profit margin, and ROKA (calculated as operating profit divided by the sum of working capital and fixed assets). The variable compensation is paid every fiscal year, depending on the extent to which those targets have been achieved by the directors.

Those indicators are used to determine the performance-linked compensation because they are considered objective metrics that reflect the company’s progress toward its key management goals.

Governance of Directors remuneration

The status of the Compensation Committee’s activities in fiscal year 2024 is as follows:

・April 26, 2024 Revision of Executive Compensation

Total amount of remuneration by officer category, total amount by type of remuneration, and number of eligible officers (FY2024)