Corporate Governance
Latest Update : Nov.6, 2024
Officers
Directors and Audit & Supervisory Board Members
The Company makes rapid and highly strategic management judgments by 12 Directors. At the same time, the Company makes significant transfer of the authority for business execution from Directors to Executive Officers by introducing an Executive Officer System to facilitate a clear distinction between management and supervisory functions and business executing functions. The Company's basic policy calls for the appointment of Directors that have the necessary knowledge, experience, and international outlook, regardless of their nationality, ethnicity, or gender, with an emphasis on the diversity of the Board of Directors.
Moreover, aimed at obtaining advice on all aspects of our corporate management and strengthening the Board of Director's functions to supervise the organizations of execution, we include four Independent Outside Directors out of the 12 Board members.
Furthermore, regarding the Audit & Supervisory Board Members, in order to strengthen and enhance its auditing functions, we have three Outside Audit & Supervisory Board Members (including one full-time Outside Audit & Supervisory Board Member) out of the four Audit & Supervisory Board members. In addition to holding the Audit & Supervisory Board and attending the Board of Directors' meetings and other important meetings, the Audit & Supervisory Board Members, in conjunction with the Independent Auditors, and the Internal Auditing Office, audit domestic offices and our Group Companies, to audit the Directors' execution of duties.
Board of Directors (link to Company webpage)
Policy and Procedures for Appointment and Dismissal of Executive Management and Nomination of Director and Audit & Supervisory Board Member Candidates
When appointing Executive Management (indicating representative directors and executive directors; hereinafter the same shall apply) and nominating Internal Director candidates, the Board of Directors gives final approval after deliberations by the Senior Executive Officer Council based on the report given by the Nomination and Compensation Committee on whether the candidate is qualified for the position from the perspective of assigning the right person to the right position, considering accurate and swift decision making, appropriate risk management, supervision of business execution and capabilities for managing each function and each business division of the Company.
If the execution of duties of Executive Management significantly fails to meet the qualifications in the above appointment criteria, dismissal will be deliberated on by the Nomination and Compensation Committee and the Board of Directors will make a decision based on the report of these deliberations.
As for the nomination of Outside Director candidates, the Board of Directors gives final approval based on the report given by the Nomination and Compensation Committee on whether the candidate is qualified for the position, based on a holistic assessment of the candidate's advanced expertise in corporate management, corporate governance, compliance, risk management, etc., following the criteria for determining independence.
In addition, when nominating Audit & Supervisory Board Member candidates, the Board of Directors gives final approval after gaining consent of the Audit & Supervisory Board upon electing a candidate after having holistically conducted reviews with consideration placed on financial, accounting, and legal expertise, knowledge of the Company's business fields and know-how in risk management and corporate management.
Outside Directors and Outside Audit & Supervisory Board Members
Criteria for appointment and independence
We appoint Outside Director and Outside Audit & Supervisory Board Member who has no personal, capital or business relationship or any other interest with the company and who has sufficient independence and is unlikely to cause a conflict of interest with general shareholders in accordance with the requirements prescribed in the Companies Act and the independence standards set forth by the Tokyo Stock Exchange.
Overview of Outside Directors election reason and expected roles / record of attendance at Important Meeting (Year ended March 2024)
Fulfilling their roles and functions, we believe the Outside Directors will ensure the sound management of the Company, promote compliance, and strengthen management oversight functions.
| Name | Independent Director |
Overview of Outside Directors election reason and expected roles / record of attendance at Important Meeting |
|---|---|---|
| Leading Independent Outside Director Yuko Miyazaki appointed in June 2022 |
◯ | Ms. Yuko Miyazaki has a wealth of experience and deep insight cultivated as an attorney-at-law and a former Supreme Court judge, in addition to her specialized knowledge of corporate legal affairs and tax affairs. She performs a supervisory role independent from management members.
(Status of attendance of Important Meeting for the Year ended March 2024)
|
| Outside Director Atsuko Matsumura appointed in June 2018 |
◯ | Ms. Atsuko Matsumura has expertise in international economics, as well as broad knowledge and experience as an educator. She has fulfilled a management oversight function from a standpoint independent of management.
(Status of attendance of Important Meeting for the Year ended March 2024)
|
| Outside Director Yuko Haga appointed in June 2020 |
◯ | Ms. Yuko Haga has a wealth of insight and experience cultivated as a management consultant in addition to professional knowledge on corporate strategy. She has fulfilled a management oversight function from a standpoint independent of management.
(Status of attendance of Important Meeting for the Year ended March 2024)
|
| Outside Director Hirofumi Katase appointed in June 2022 |
◯ | Mr. Hirofumi Katase has a wealth of insight and experience cultivated by serving important positions in government agencies in addition to professional knowledge on economics, industry, technological development, international trade, energy, the environment and space development. He has fulfilled a management oversight function from a standpoint independent of management.
(Status of attendance of Important Meeting for the Year ended March 2024)
|
Outside Audit & Supervisory Board Member election reason and record of attendance at Important Meeting (Year ended March 2024)
We believe the Outside Audit & Supervisory Board Members, in fulfilling their roles and functions, will harness their finance and accounting expertise, as well as vast professional knowledge of finance, accounting and legal to provide strict management oversight.
| Name | Independent Director |
Reason for appointment Status of attendance at Important Meeting |
|---|---|---|
| Outside Audit & Supervisory Board Member Hiroshi Yamamoto appointed in June 2023 |
◯ | Mr. Hiroshi Yamamoto has a wealth of experience in a global company and knowledge of finance and accounting obtained. He was elected as Outside Audit & Supervisory Board Member so that his professional knowledge reflected in the Company's audit. (Status of attendance of Important Meeting for the Year ended March 2024)
|
| Outside Audit & Supervisory Board Member Shinichiro Shibasaki appointed in June 2014 |
◯ | Mr. Shibasaki is well-versed in corporate legal affairs as an attorney-at-law. He was elected as Outside Audit & Supervisory Board Member so that his professional knowledge reflected in the Company's audit.
(Status of attendance of Important Meeting for the Year ended March 2024)
|
| Outside Audit & Supervisory Board Member Makoto Hoshino appointed in June 2019 |
◯ | Mr. Hoshino has a wealth of experience of tax operations for many years since joining the National Tax Agency, as well as considerable knowledge of finance and accounting. He was elected as Outside Audit & Supervisory Board Member so that his abundant experience and keen insight reflected in audits of the Company.
(Status of attendance of Important Meeting for the Year ended March 2024)
|
Compensation for Directors and Audit & Supervisory Board Members
In order to enhance the transparency and objectivity of processes for determining the remuneration of Directors, the Company has established a Nomination and Compensation Committee, which has an independent Outside Director as Chairman, and independent Outside Directors comprising at least half of its members.
The policy on determining remuneration to individual Directors was deliberated in the Nomination and Compensation Committee, and the Board of Directors determined it after giving careful considerations to recommendations from the committee.
With regard to determining remuneration to individual Directors, the Board of Directors has determined the policy on determination to be in line as the Nomination and Compensation Committee is conducting a comprehensive review including consistency between the proposal and policy on determination.
Basic Principle to the Officer Compensation System
The Company will establish and operate the Officer Compensation System based on the following concepts.
I. A balanced system that realizes a high incentive effect that draws out the full potential of individual Directors and a sustainable increase in corporate value from a medium- to long-term perspective.
II. Aim for a level of compensation that is competitive in attracting talented domestic and overseas personnel and can be attractive to the Company's employees in their pursuit to be part of future management team.
III. An appropriate framework that ensures transparency, fairness, and rationality in the fulfillment of accountability to shareholders, investors, and other stakeholders.
Policy and Procedures for Determination of Director and Auditor & Supervisory Board Member's Compensation
Executive Management and Directors' Compensation
The remuneration to individual Directors is determined by a resolution of the Board of Directors after consulting the Nomination and Compensation Committee, within the maximum amount authorized by the General Meeting of Shareholders.
Compensation for Directors is composed as follows.
| Composition | Name | |
|---|---|---|
| Non-performance-linked | Cash | Basic compensation |
| Short-term performance-linked compensation (bonuses) | ||
| Performance-linked (*1) | Medium- to long-term performance-linked compensation (stock/cash) | |
| Stock | ||
| Performance-linked stock compensation | ||
Although the ratio of non-performance-linked compensation and performance-linked compensation and the ratio of cash and stock are not determined because of fluctuations due to the degree in achieving corporate earnings each fiscal year, the standards of non-performance-linked compensation : performance-linked compensation = 1 : 2 or more, and stock to be 10% or more of the total amount of compensation, are according to the policy designed to be highly linked to corporate earnings.
(*1) For non-executive Directors (including Outside Directors), basic compensation (non-performance-linked) is set, and performance-linked compensation is not set, taking into account expected roles, etc. of each Director.
Basic compensation
Basic compensation is composed of responsibility compensation (fixed position) according to the "Directors' Compensation Regulations," and performance compensation (individual performance evaluations), revised each fiscal year taking into consideration each Director's track record, performance, and various other factors, and the amount paid is determined by a resolution of the Board of Directors after consulting the Nomination and Compensation Committee.
Short-term performance-linked monetary compensation (bonuses)
As short-term performance-linked monetary compensation (bonuses) focuses on profit, the final result of each fiscal year, and corporate value expressed in the stock price is included in Director evaluations, consolidated corporate earnings centered on consolidated profit for the year and stock price levels, including the Company's market capitalization, are used as evaluation indicators, with the incentives to improve corporate earnings and increase in corporate value by achieving the management plan. The amount paid is calculated based on the bonus calculation table according to the "Directors' Compensation Regulations," and with adjustments made within a certain ratio based on individual performance evaluations, is determined by a resolution of the Board of Directors after consulting the Nomination and Compensation Committee.
| Evaluation indicator | Result(FY Mar.2024) |
|---|---|
| Consolidated profit for the year | 55.2 billion yen |
| Growth of the consolidated net sales | +8.5% |
| Company's stock price performance compared to the Nikkei stock average | △0.17% |
| Market capitalization at fiscal year-end | 1,260.3 billion yen |
| Consolidated operating income margin (8%-10%) | +5.2% |
Medium- to long-term performance-linked compensation (stock/cash)
* Newly established (Applicable from FY Mar.2025)
Medium- to long-term performance-linked compensation (stock/cash) will be added as a driving force for the realization of 2.5 trillion yen in net sales and 250 billion yen in operating income, the targets to be achieved in the fiscal year ending March 31, 2029. The number of shares (points) or amount paid are calculated based on the points calculation table or the Medium- to long-term performance-linked compensation calculation table using the items in the table below as indicators. Details are stipulated in the "Share Grant Regulations" and "Directors' Compensation Regulations," which are determined in the Board of Directors meeting.
| Evaluation indicator | Aim, etc. |
|---|---|
| Achievement of EPS growth rate of 15% (the latest 3-year average) |
By using the achievement of an EPS growth rate of 15% or above, which is a management indicator, as an evaluation indicator based on the latest 3-year average, the Company will strengthen its motivation from a medium- to long-term perspective to continuously generate consolidated profit for the year, which is a source of growth. The Company will grant cash or shares according to the level of achievement of the indicator, ranging from 15% to 20%. |
Medium- to long-term performance-linked compensation shall be paid in stock or cash. However, Directors who do not hold a number of the Company's shares at a level required by the Company's "Stock Ownership Guidelines for Directors"(*2) shall in principle be paid in stock.
(*2) Stock Ownership Guidelines for Directors
Performance-linked stock compensation * Revised (Applicable from FY Mar.2025)
Performance-linked stock compensation is a number of the Company's shares equivalent to the number of points the Company grants to Directors upon retirement according to the achievement of each evaluation indicator toward achieving the target for consolidated profit for the year, achieving ROE, a management indicator, and realizing SBT targets (*3). The purpose is to further clarify the link between Directors' compensation and the Company's business performance and stock value and to raise awareness among Directors of the need to contribute to improving the Company's performance and enhancing its corporate value over the medium- to long- term by sharing with shareholders the benefits and risks associated with stock price fluctuations. The number of shares (points) to be paid is calculated based on the points calculation table using the items in the table below as indicators. Details are stipulated in the "Share Grant Regulations," which is determined in the Board of Directors meeting.
| Evaluation indicator | Aim, etc. |
|---|---|
| Consolidated profit for the year | The most important management indicators as the source for growth investments |
| Achievement of ROE 15% | The current system is centered on consolidated profit for the year and this aims to supplement the medium- to long-term perspective. |
| Achievement of GHG (scope 1-2) -5% YoY | A specific numerical target to be set in order to realize SBT targets (*3), which is the Company's external commitment. |
(*3) As a target of Science Based Targets (SBT) under the Paris Agreement, the Company has announced a reduction of Greenhouse Gas (GHG) (scope1-2) by 42% compared to the fiscal year ended March 31, 2023, and the achievement of this target needs to realize a reduction of 5% or more compared to the previous year.
Compensation for Audit & Supervisory Board Members
Remuneration for Audit & Supervisory Board Members is limited to basic remuneration of a fixed monthly salary, taking into consideration the roles expected of each individual Director and Audit & Supervisory Board Member.
Resolution date of the General Meeting of Shareholders regarding compensation for Directors Audit & Supervisory Board Members
| Categories | Resolution date | Compensation categories | Resolution content | Number of members at the time of resolution |
|---|---|---|---|---|
| Director | June 29, 2017 The 71st Ordinary General Meeting of Shareholders |
Basic compensation performance-linked monetary compensation |
Within 1.5 billion yen per year (this amount includes maximum annual compensation of 50 million yen for Outside Directors) |
12 (including two Outside Director) |
| Director (excluding Outside Director) |
June 28, 2012 The 66th Ordinary General Meeting of Shareholders |
Stock options | Within the above compensation amount, within 30 million yen per year | 8 |
| Director (only for Executive Director) |
June 27, 2024 The 78th Ordinary General Meeting of Shareholders |
Performance-linked stock compensation | In addition to the above compensation amount, within 160,000 points per fiscal year | 7 Executive Directors |
| Outside Director | June 29, 2021 The 75th Ordinary General Meeting of Shareholders on |
Basic compensation | Up to 70 million yen per year within the total remuneration amount for Directors | 4 Outside Director only |
| Audit & Supervisory Board Member | June 28, 2007 The 61st Ordinary General Meeting of Shareholders |
Basic compensation | Within 100 million yen per year | 5 |
Main activities of the Board of Directors and the Nomination and Compensation Committee on the decision process for Directors' Compensation during the fiscal year and Outline of the committee procedure
The Nomination and Compensation Committee consists of six members (chaired by Independent Outside Director): four Independent Outside Directors, one Independent Outside Audit & Supervisory Board Member and one Representative Director, Chairman CEO. The resolution of the committee shall be made by a majority of the members present at the committee where the majority of the members are present.
The Nomination and Compensation Committee was held seven times in the fiscal year ended March 31, 2024. It has discussed proposals of bonuses and changes to the basic compensation for Directors in light of the Company's consolidated performance and stock price level for previous fiscal year, and then the committee has made reports to the Board of Directors.
In response to the report from the above Nomination and Compensation Committee, the Board of Directors meeting on May 11, 2023 has decided to provide bonuses to directors, and the Board of Directors meeting on June 29, 2023 has decided to revise the basic compensation. In addition, to complement the medium- to long-term perspective and as a driving force toward achieving the management target of 250 billion yen in operating income, based on tne report of Nomination and Compensation Committee, Board of Directors meeting on March 27, 2024 has decided partially revising the existing executive compensation system to introduce an additional Medium- to long-term performance-linked compensation (stock/cash).
Total compensations for Directors, Audit & Supervisory Board Members, Outside Directors and Outside Audit & Supervisory Board Members combined for the past three fiscal years
| Actual remuneration for Directors and Audit & Supervisory Board Members |
Unit | 76th FY2021 (Apr.2021-Mar.2022) |
77th FY2022 (Apr.2022-Mar.2023) |
78th FY2023 (Apr.2023-Mar.2024) |
||
|---|---|---|---|---|---|---|
| Directors | Number of payees | persons | 13 | 13 | 13 | |
| Basic Compensation | Thousand Yen |
289,805 | 274,478 | 340,509 | ||
| Performance-linked monetary compensation (Allowance amount) |
Thousand Yen |
467,500 | 567,452 | 373,412 | ||
| Performance-linked stock compensation (Allowance amount) |
Thousand Yen |
70,000 | 60,000 | 35,000 | ||
| Total | Thousand Yen |
827,305 | 901,930 | 748,921 | ||
| of which, Outside Directors |
Number of payees | persons | 5 | 6 | 5 | |
| Total amount of Basic Compensation | Thousand Yen |
54,600 | 54,600 | 59,809 | ||
| Audit & Supervisory Board members | Number of payees | persons | 4 | 4 | 6 | |
| Total amount of Basic Compensation | Thousand Yen |
48,800 | 49,845 | 51,285 | ||
| of which, Outside Audit & Supervisory Board Meeting members | Number of payees | persons | 3 | 3 | 4 | |
| Total amount of Basic Compensation | Thousand Yen |
33,400 | 34,215 | 34,765 | ||
| Total amount of remuneration for Directors and Audit & Supervisory Board Members | Thousand Yen |
876,105 | 951,775 | 800,207 | ||
Notes:
- The number of persons paid in the above table includes the number of directors and corporate auditors who retired at the conclusion of the Ordinary General Meeting of Shareholders for the relevant fiscal year.
- The compensation for Directors excludes the salary to be paid for service as employee for Directors who concurrently hold a post of officer or employee of the Company.
- The amount of compensation, etc. is shown with fractions of 1 thousand yen rounded down.
Total compensation exceeds 100 million yen (for the fiscal year ended March 31, 2024)
| Name | Total for each class of compensation (thousand yen) |
Total compensation (thousand yen) |
||
|---|---|---|---|---|
| Basic compensation |
Performance- linked monetary compensation |
Performance- linked stock compensation |
||
| Yoshihisa Kainuma | 83,232 | 155,683 | 5,000 | 243,915 |
| Katsuhiko Yoshida | 51,466 | 66,360 | 5,000 | 122,826 |
Guidelines on Ownership of MinebeaMitsumi Shares
The Company has established "Guidelines on Ownership of MinebeaMitsumi Shares" for Directors.
Related Documents
- Corporate Governance Report (July 3, 2024) (1.01MB/23pages)
- Articles of Incorporation (June 27, 2024) (673KB/10pages)
