Remuneration for Directors

Basic Philosophy

Moriroku regards its remuneration system for directors as a mechanism to secure, retain, and motivate human resources who are essential for the sustainable enhancement of corporate value.

Remuneration levels for officers are determined based on the Company’s business environment and on remuneration levels at major companies of a similar size.

Director Remuneration

The performance-linked remuneration for Directors (excluding Directors who are Audit & Supervisory Committee Members and Outside Directors) consists of performance-linked remuneration and performance-linked stock-based remuneration, and the ratio of performance-linked remuneration to total remuneration shall be approximately 35%.

Performance-linked remuneration is short-term incentive remuneration and constitutes performance-linked monetary remuneration that fluctuates based on the performance for each fiscal year. The amount is calculated by multiplying the monthly fixed basic remuneration by a certain coefficient and multiplying the resulting amount by a coefficient that is based on the degree of achievement of the targets for consolidated net sales (evaluation weight: 25%), consolidated operating income (evaluation weight: 50%), and profit attributable to owners of parent (evaluation weight: 25%) . The payment amount is 100% when targets are achieved and fluctuates between 0% and 200%, and is paid at a certain time each year.

Stock-based remuneration is performance-linked, restricted stock-based remuneration as an incentive for medium- to long-term performance and enhancement of corporate value, and is subject to change based on performance, management indicators, etc. It shall, in principle, be granted in the first year of the Mid-Term Management Plan. The granting of shares during the tenure of office aims to promote further value-sharing with shareholders. The number of shares to be granted is set as a percentage of the basic remuneration, and the financial indicators and sustainability indicators set forth in the Mid-Term Management Plan are used as the conditions for lifting the transfer restrictions upon achievement of the targets linked to such indicators or according to the degree of achievement of the targets.

Refund of compensation, etc. (Mars clause, clawback clause)​

To ensure the soundness of the remuneration system, if certain events occur—such as serious violations of internal regulations or other unlawful acts, or material accounting errors that affect the indicators used for calculating remuneration—the Company may seek to forfeit unpaid remuneration (Malus Clause) or reclaim paid remuneration (Clawback Clause) based on the decision of the Board of Directors after deliberation by the Nomination & Remuneration Advisory Committee.