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
The executive compensation system covers three types: fixed compensation, annual performance-based compensation, and transfer-restricted, equity-based compensation. The Company pays only fixed remuneration to outside directors and outside corporate auditors, who are independent of operational control.
|Fixed compensation||Fixed remuneration is set for each job title and subdivided job grade.|
|Performance-based compensation is determined by setting a standard value for each job title, using the company's consolidated sales and EBITDA as evaluation indices. The degree of achievement for consolidated results (100%) and the degree of contribution of each person to our company's performance, etc., is evaluated comprehensively and determined within the range of 0-200% of the standard value.|
|A standard value is determined for each job grade and an equivalent amount of Company common stock, with transfer restrictions, is granted annually. Transfer restrictions are canceled on retirement.|
|Reasons for selecting indices|
|Sales||Selected as an index for the growth potential of a given market.|
|EBITDA||Selected as an index to measure cash-creation output.|