Election and Compensation of Officers
Election of three outside directors to secure transparency and soundness
Criteria for Election of Officers
|Criteria for Election|
|Candidates for Directors||
It is a policy of the Company to elect as candidates for its directors competent persons who are capable of carrying out their duties and responsibilities as directors in response to the entrustment of management by the shareholders. Based on this policy and the points listed below, it will be required institutionally to have the candidates for directors recommended by the Nominating and Compensation Committee to the Board of Directors for final decision.
nside directors are elected from among persons experienced in business divisions including sales and manufacturing and persons experienced in planning, development and administration divisions while outside directors are elected from among corporate executives and literates taking their experience, insight and expertise into consideration.
It is a policy of the Company to elect as candidates for its corporate auditors competent persons who, when the importance of the audits and corporate auditors’ functions as well as their personalities and insights are fully considered, are capable of carrying out their duties as the Company’s corporate auditors. Based on this policy, the Nominating and Compensation Committee will be required institutionally to recommend the candidates for corporate auditors to the Board of Directors. The candidates will be finally decided when the consent of the Board of Corporate Auditors to present the proposal for their election to the general shareholders’ meeting has been obtained.
Compensation for Officers
Basic Policy for Officers’ Compensation System
- Officers’ compensation is positioned as one of the most important measures to achieve sustainable growth and enhancement of the corporate value of KITO Group.
- Compensation for directors other than outside directors and for executive officers reflects the degree of achievement of the targeted consolidated results and the contribution by the respective officers to such results, and the share of the performance-based compensation becomes larger as they assume higher positions and greater responsibilities.
- The Nominating and Compensation Committee, the majority of the members of which is formed by outside directors to secure the transparency and objectivity of such compensation, deliberates upon compensation for directors and executive officers and makes recommendations to the Board of Directors.
Structure of Compensation
Compensation for directors other than outside directors and for executive officers comprises the basic compensation provided in fixed amounts, performance-based annual bonus and retirement allowance also based on the performance. Compensation for the outside directors consists only of the compensation in fixed amounts taking their roles into consideration.
|Compensation in Fixed Amounts
|The compensation is set at an appropriate level based upon the external database, etc. and taking the size of the Company and duties to be carried out by the directors into consideration comprehensively.|
|About 25 to 50% of the basic compensation is determined as the standard amount for officers in different positions. An amount equivalent to 0 to 200% of the standard amount, which is determined based upon the comprehensive evaluation of the respective officers’ degree of achievement of their targeted results and their contribution to the Company’s performance using its consolidated sales and EBITDA (total amount of earnings before tax, extraordinary profit or loss, interest paid and depreciation and amortization) as the criteria for evaluation, is added to the standard amount.|
(Retirement Allowance for Directors)
|About 10 to 25% of the basic compensation is determined as the annual standard for officers in different positions. An amount equivalent to 50 to 200% of the annual standard, which is determined based upon a comprehensive evaluation of the respective directors’ degree of achievement of their targeted results and their contribution to the Company’s performance using its consolidated sales and EBITDA (total amount of earnings before tax, extraordinary profit or loss, interest paid and depreciation and amortization) as the criteria for evaluation, is set aside as an allowance every year.