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 in the form of stock, 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.

A performance-based stock remuneration scheme for Directors (excluding Directors who are the Audit Committee members and outside directors) was introduced at the 52nd Ordinary General Meeting of Shareholders held on June 26, 2018. It is operated separately from the remuneration policy on the upper limit.

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 stock remuneration for Directors (excluding Directors who are the Audit and Supervisory Committee members and Outside Directors)

Performance-based stock remuneration for Directors (excluding Directors who are the Audit and Supervisory Committee members and Outside Directors) is calculated by using the following formula, based on the number of points granted to each Director in consideration of his/her position, the business performance of IRISO and others. The points are calculated by employing a structure called the Board Incentive Plan (BIP) Trust. As a general rule, one share is granted per point for every three fiscal years.

(Point calculation formula)
Points = Base points by position × Coefficient of performance (*)

(*) The coefficient of performance is decided based on the achievement rates to the targets of consolidated net sales and operating income margin, as well as EPS and ROE for each fiscal year.
Consolidated net sales and operating income margin, as well as EPS and ROE for each fiscal year, are chosen as assessment indices for performance-linked remuneration because they serve as objective management indices for measuring the status of the goal achievement of IRISO in numerical terms.

Governance of Directors remuneration

The status of the Compensation Committee’s activities in fiscal year 2023 is as follows:

・May 19, 2023: Executive Compensation Results (BIP Trust Distribution Status)
・March 22, 2024 Revision of Executive Compensation

Total amount of remuneration by officer category, total amount by type of remuneration, and number of eligible officers (FY2023)