Supplementary information and views on the agenda of the 20th regular shareholders' meeting.
Recently, Institutional Shareholder Services Inc. (ISS), a company that provides advice on exercising voting rights, recommended against our fourth agenda item at the 20th regular shareholders meeting (hereinafter referred to as the 'Meeting'), 'Regarding a revision to compensation for directors (excluding audit and supervisory committee members, and external directors) related to the introduction of a post-grant stock compensation plan.' (hereinafter referred to as the 'Proposal').
Therefore, we would like to provide supplementary information and our views on ISS's recommendation as follows. We kindly ask our shareholders to review the following contents and give their understanding of the Proposal.
Record
- Reasons for ISS's recommendation of opposition
ISS issued a report recommending opposition to the Proposal at the Meeting, stating that no specific performance hurdle was set for the Restricted Stock Unit (hereafter referred to as 'RSU') in the Proposal, and that the target period for granting shares was not disclosed.
- Supplementary information and our views
In the Meeting, we aim to align the long-term interests of our directors, excluding audit and supervisory committee members and external directors (hereafter referred to as 'Target Directors'), with those of our shareholders and provide incentives for mid- and long-term corporate value improvement, by introducing a post-grant stock compensation plan that allocates our common stock to the Target Directors after a certain period of time, which includes Performance Shares (hereafter referred to as 'PSUs') and RSUs.
Regarding the target period until shares or other equity securities are granted in RSUs, we explained on page 30 of the notice of the Meeting that it would be determined by the Board of Directors, and the period has been set to 3Yearas a supplementary explanation because the Board of Directors has resolved to set the period to
The reason why no specific performance hurdle was set for RSUs is because the compensation based on achievement of performance goals is allocated as PSUs, and compensation for the period of service aimed at retention of the Target Directors in the mid-term is classified as RSUs.
With the above supplementary explanation, we believe that it does not violate ISS's criteria.
We kindly ask our shareholders to review this content again and carefully judge the suitability of the Proposal.
Above.