In the nomination and appointment of candidates for Directors, Audit & Supervisory Board Members and executive officers, OKI considers the following matters in addition to meeting legal requirements.
The criteria for submitting a proposal to dismiss a Director, an Audit & Supervisory Board Member, or an executive officer take into consideration the following: where the person's act violates or infringes on the law and the Articles of Incorporation; whether the person has become unable to properly perform his/her duties. Such proposals are immediately deliberated by the Personnel Affairs and Compensation Advisory Committee, which then submits its proposal to the Board of Directors.
Name | Reasons for Appointment and Expected Roles | Status of Attendance at meeting of the Board of Directors or the meetings of the Audit & Supervisory Board (FY2022) | |
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Outside Directors | Shigeru Asaba | Mr. Shigeru Asaba is currently a professor of Waseda Business School (Graduate School of Business and Finance). Mr. Asaba has academic expertise in business in general and high ethical standards through his specialist knowledge in the fields of industrial organizations, corporate strategy, competitive strategy, ownership structures, corporate governance and corporate conduct. In addition, he has a high degree of independence from the management team, experience as an outside director of other companies, and serves as the chairman of the Personnel Affairs and Compensation Advisory Committee. Based on the above, and particularly on his academic expertise in all aspects of business, including marketing and innovation, the Company has appointed him as an Outside Director as it is expected that he will contribute to the deepening of deliberations on the progress of Medium-Term Business Plan, oversight of the development plan of successors, and improvement of risk and crisis response at the Board of Directors meetings. Although he has never had experience of being involved in corporate management other than as an outside officer, the Company determined that he will be able to carry out the duties of Outside Director appropriately for the aforementioned reason. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders. |
Board of Directors 13/13 (100%) |
Tamotsu Saito | As a long-time representative director of IHI Corporation and a business leader not only in the industry but also in Japan, Mr. Tamotsu Saito has a wealth of management experience and high ethical standards in the manufacturing industry. In addition, he has a high degree of independence from the management team, experience as an outside director of other companies, and serves as the member of the Personnel Affairs and Compensation Advisory Committee. Based on the above, and particularly on his manufacturing, development and global management experience, the Company has appointed him as an Outside Director as it is expected that he will contribute to the deepening of deliberations on the progress of Medium-Term Business Plan, oversight of the development plan of successors, and improvement of risk and crisis response at the Board of Directors meetings. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders. |
Board of Directors 13/13 (100%) | |
Izumi Kawashima | Ms. Izumi Kawashima is currently a professor of the Faculty of Social Sciences at Waseda University. She specializes in commercial law (mainly the Companies Act) and the Financial Instruments and Exchange Act, and particularly has academic specialist knowledge relating to the Companies Act and corporate governance as well as high ethical standards. In addition, she has a high degree of independence from the management team, and has devoted her energies to the display of the Board of Directors functions as the chairperson of the Company's Board of Directors since June 2021. Ms. Kawashima also has experience as an outside director of other companies, and serves as a member of the Personnel Affairs and Compensation Advisory Committee. Based on the above, and particularly on her knowledge as a legal expert in the Companies Act and the Financial Instruments and Exchange Act, etc., the Company has appointed her as an Outside Director as it is expected that she will contribute to the deepening of deliberations on the progress of Medium-Term Business Plan, oversight of the development plan of successors, and improvement of risk and crisis response at the Board of Directors meetings. Although she has never had experience of being involved in corporate management other than as an outside officer, the Company determined that she will be able to carry out the duties of Outside Director appropriately for the aforementioned reason. The Company believes that she is sufficiently independent and has no risk of conflicts of interest with general shareholders. |
Board of Directors 13/13 (100%) | |
Makoto Kigawa | After serving as an officer at a financial institution, Mr. Makoto Kigawa served as Representative Director of Yamato Holdings Co., Ltd. for more than ten years, and has extensive management experience and high ethical standards, mainly in the logistics industry, including the transformation of business models using ICT. In addition, he has a high degree of independence from the management team, experience as an outside director of other companies, and serves as the member of the Personnel Affairs and Compensation Advisory Committee. Based on the above, and particularly on his supply chain management and risk management experience, the Company has appointed him as an Outside Director as it is expected that he will contribute to the deepening of deliberations on the progress of Medium-Term Business Plan, oversight of the development plan of successors, and improvement of risk and crisis responseat the Board of Directors meetings. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders. |
Board of Directors 12/13 (92%) | |
Outside Audit & Supervisory Board Members | Hideo Shiwa | He has headed the finance & accounting and planning divisions and presided over a business company and unit of the head office of a manufacturing company before serving as Director and Senior Managing Executive Officer and completing overseas assignments. The Company has appointed him as an Audit & Supervisory Board Member based on its judgement that he can conduct appropriate audits of its management by making use of his extensive experience, global insight, and high ethical standards. Based on his background described above, he has considerable financial, accounting and legal knowledge required for the Company's audits. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders. |
Board of Directors 13/13(100%) Audit & Supervisory Board 18/18(100%) |
Ryuichi Makino | As a certified public accountant, he has been engaged in accounting audit of manufactures and other businesses in a wide range of industries for many years. He also has extensive knowledge in internal control. The Company has appointed him as an Audit & Supervisory Board Member based on its judgement that he can conduct audits of its management in an objective, neutral manner by making use of his extensive experience, insight, and high ethical standards. Based on his background described above, he has considerable financial, accounting and legal knowledge required for the Company's audits. Although he has never been involved in corporate management, the Company has determined that he is able to carry out the duties of Outside Audit & Supervisory Board Member appropriately for the aforementioned reason. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders. |
Board of Directors 13/13(100%) Audit & Supervisory Board 18/18(100%) |
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Yoshihiro Tsuda | As a certified public accountant, he has been involved in global accounting audits in various industries for many years. The Company has judged that he can conduct objective and neutral audits of the Company's management from a global perspective by utilizing his wealth of experience, knowledge and high ethical standards, and has therefore been appointed him as an Audit & Supervisory Board Member. Although he has no experience of being involved in the management of a company in the past, the Company believes that he will be able to appropriately execute his duties as Outside Audit & Supervisory Board Member for the reasons mentioned above. The Company believes that he is sufficiently independent and has no risk of conflicts of interest with general shareholders. |
Board of Directors 13/13(100%) Audit & Supervisory Board 18/18(100%) |
OKI has established independence standards for the appointment of Outside Directors and Outside Audit & Supervisory Board Members (together, "Outside Officers"), and places importance on independence based on these standards when considering candidates.
Independence Standards for Appointment of Outside Officers
The Company appoints Outside Directors and Outside Audit & Supervisory Board Members based on the following criteria.
a. People listed in (2) to (7) above (limited to important executives(*2) for "executives" in (2) to (5), (2) for "people belonging to associations" in (6), important executives and people whose associations have professional qualifications such as certified public accountants or lawyers in the case of accounting or legal expert associations such as audit firms or legal firms, and people who have professional qualifications such as certified public accountants and certified public accountants for "people belonging to audit firms" in (7).
b. An important executive of the OKI Group
c. A person falling under category b above in the past 10 years
The Company has provided notice that outside officers who qualify as independent officers are Independent Officers.
In addition to the above policies, the Company has appointed Outside Directors and Outside Audit & Supervisory Board Members based on the fact that their experience and knowledge in their respective fields of expertise are useful for the Company today.
The Company established the policy on determining the content of individual compensation, etc. for Directors, and a summary is as follows.
OKI's basic policy on compensation for directors and executive officers is to serve as incentives for the performance improvement with the aim of the continuous enhancement of the corporate value and enforcement of the corporate competitiveness while being the compensation structure that can attract excellent human resources.
The compensation structure is divided into performance-linked compensation and compensation other than performance-linked compensation, and consists of basic compensation, which is a fixed compensation; and annual incentive compensation and medium- to long-term incentive compensation, which are performance-linked compensation. These compensations have been provided as part of efforts to develop an environment for a shift to the management focused on "more aggressive goal setting" and "growth over medium- to long-term" in order to achieve "continuous growth" of the OKI Group. The compensation for outside directors consists only of basic compensation.
Basic compensation | Annual incentive | Medium- to long-term incentive | |
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Inside Directors (Concurrently serving as Executive Officer) |
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Outside Directors | ![]() |
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As medium- to long-term incentive compensation, the Company provided compensation-type stock options until FY2022. No. 4 of 99th Ordinary General Meeting of Shareholders is suggested, performance-linked stock compensation (performance share units) will be provided from FY2023, in which shares will be delivered in proportion to the achievement of the performance of the Medium-Term Business Plan (three years).
・FY2022
For annual incentive compensation, 70% of the amount to be paid is calculated by multiplying the standard compensation amount set for each position in advance multiplied by a performance evaluation factor based on quantitative evaluation, and 30% is calculated by qualitative evaluation in accordance with (iii). The performance indicators used in the quantitative evaluation are those (sales, operating income, and working capital) that have been determined to be appropriate as performance evaluation indicators for achieving the OKI Group's sustainable growth. The quantitative evaluation consists of the OKI Group's consolidated performance-linked portion and the performance-linked portion by the division in charge, and the target and actual results of the performance evaluation indicators for the OKI Group's consolidated performance-linked portion are as follows.
(Unit: Billions of yen)
Performance evaluation indicator | Targets | Actual results |
---|---|---|
Net sales | 425.0 | 369.1 |
Operating income | 9.0 | 2.4 |
Working capital | 95.2 | 103.5 |
The amount (or quantity) of the medium- to long-term incentive compensation is based on ROE as a performance indicator, which is judged to be an appropriate indicator for improving corporate and shareholder's value over the medium and long term and share with shareholders. To calculate the amount, the Company sets the standard compensation amount for each position in advance, then multiplies it by a performance evaluation factor. The targets and actual results are as follows.
Performance evaluation indicator | Targets | Actual result |
---|---|---|
ROE | 10% | -2.7% |
・FY2023
Annual incentive compensation will be changed to 80% quantitative evaluation and 20% qualitative evaluation to increase transparency.
For medium- and long-term incentive compensation, we will place more emphasis on medium- and long-term growth, and add sales and ESG-related indicators to the performance evaluation indexes in order to improve linkage with the Medium-Term Business Plan.
As for how to determine the policy on determining individual compensation, etc. for Directors, in order to secure transparency and objectiveness in the decision-making processes concerning compensation for officers, the Company has established the Personnel Affairs and Compensation Advisory Committee, which consists of only Outside Directors. It deliberates, prior to resolutions at a Board of Directors meeting, on the structure and level of compensation for directors and executive officers, and reports the results to the Board of Directors. In addition, the appropriateness of the structure and level of compensation is validated mainly utilizing objective evaluation data from external organizations.
The Personnel Affairs and Compensation Advisory Committee held a total of 12 meetings during the fiscal year under review, discussed the compensation structure for officers in six of these meetings, and reported the results three times.
Since the Board of Directors decided the content of individual compensation, etc. for Directors for the fiscal year under review after confirming the content of the report, it was evaluated that the content of the individual compensation, etc. for Directors for the fiscal year under review complied with the policy above.
Type | Content of compensation | ||
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Basic compensation | Fixed compensation | Monetary compensation |
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Annual incentive compensation | Performance-linked compensation |
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Medium- to long-term incentive compensation | Non-monetary compensation |
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As for the amount of monetary compensation for Directors, at the 82nd ordinary general meeting of shareholders held on June 29, 2006, it was resolved that the annual amount for Directors would be ¥600 million or less (not including employee salary for an employee who is serving as Director). The number of Directors at the end of the ordinary general meeting of shareholders was eleven (including one outside director).
Separately from the monetary compensation, at the 92nd ordinary general meeting of shareholders held on June 24, 2016 and the 97th ordinary general meeting of shareholders held on June 29, 2021, it was resolved that the compensation-type stock option for Directors excluding outside directors would be ¥100 million or less per year. The number of Directors at the end of the ordinary general meetings of shareholders was five (excluding outside director), respectively.
The introduction of performance-linked stock compensation (performance share units) has been submitted as Proposal No. 4 of 99th Ordinary General Meeting of Shareholders.
As for the amount of monetary compensation for Audit & Supervisory Board Members, at the 82nd ordinary general meeting of shareholders held on June 29, 2006, it was resolved that it would be ¥100 million or less per year. The number of Audit & Supervisory Board Members at the end of the ordinary general meeting of shareholders was four.
The Company commissions the decision on the specific content of individual remuneration related to annual incentive compensation for Directors based on a resolution for the commission of the Board of Directors as below. As for the part commissioned to a Director who is concurrently serving as President and Executive Officer, the Company has taken measures such as deliberating the validation at the Personnel Affairs and Compensation Advisory Committee to ensure that the Director adequately executes his/her authority.
Applicable Directors | Commissioned person | Content of the commissioned authority | Reason for the commission of the authority |
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Director concurrently serving as the Chairman and Executive Officer or the President and Executive Officer | Members of the Personnel Affairs and Compensation Advisory Committee (Directors Shigeru Asaba, Tamotsu Saito, Izumi Kawashima, and Makoto Kigawa) | Qualitative evaluation for 30% of annual incentive compensation | To secure transparency of the process and objectivity of evaluation |
Executive Director other than the above | Director concurrently serving as the President and Executive Officer (Director Takahiro Mori) | Qualitative evaluation for 30% of annual incentive compensation | To focus on aggressive goal-setting for each task assigned to the person |
From FY2023, the portion of compensation that is subject to qualitative evaluation will be changed to 20%.
Officer Title | Amount of payment | Amount of payment by type of compensation | Number of applicable officers | ||
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Fixed compensation | Performance-linked compensation | ||||
Monetary compensation | Non-monetary compensation | ||||
Basic compensation | Annual incentive | Medium- to long-term incentive | |||
Directors (excluding Outside Directors) |
¥238 million | ¥212 million | ¥25 million | — | 6 |
Audit & Supervisory Board Members (excluding Outside Audit & Supervisory Board Members) |
¥46 million | ¥46 million | — | — | 2 |
Outside officers Outside Directors Outside Audit & Supervisory Board Members |
¥55 million ¥27 million |
¥55 million ¥27 million |
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4 3 |