Corporate Governance
Corporate Governance
The Group strives to enhance and strengthen its corporate governance to realize transparent, fair, agile and definitive decision-making to live up to the trust of its shareholders and other stakeholders as well as to achieve sustainable growth and enhancement of its corporate value over the medium- to long-term.Please refer to the details below.
Corporate Governance System
Function of Each Organization
(1) General Meeting of Shareholders
The Company recognizes the General Meeting of Shareholders as the highest decision-making body of the Company, the place for shareholders to receive and exchange information, and the place for exercising of voting rights.
(2) Board of Directors
In addition to regular monthly meetings, extraordinary meetings of the Board of Directors are held flexibly when necessary to execute its operation and mutually supervise the directors’ performance of their duties. Also, the outside directors are responsible for monitoring management from their objective standpoints by utilizing their abundant management experiences and broad expertise.
(3) Audit and Supervisory Committee
Audit and Supervisory Committee meets once a month after the regular Board of Directors meetings, and attends meetings of the Board of Directors and other important meetings to express opinions to enhance the effectiveness of Corporate Governance.
(4) Management Committee
Management Committee, which consists of President Executive Officer, directors and corporate officers, etc. appointed by President Executive Officer, meets weekly. Through these meetings, the committee aims to check day-to-day executions of business operations, expedite decision-making, and enhance its corporate value.
(5) Independent (Accounting) Auditors
The Company has entered into an audit contract with Ernst & Young ShinNihon LLC and has been audited appropriately as necessary in accordance with the Financial Instruments and Exchange Act and the Companies Act.
Board of Directors and Audit and Supervisory Committee
1. Overview of Board of Directors and Audit and Supervisory Committee
| Organizational Structure | Company with Audit and Supervisory Committee | |
|---|---|---|
| Board of Directors | Chairperson | Representative Director |
| The number of directors | 13 | |
| The number of female directors (rate) | 2（15.4％） | |
| The number of independent outside directors (rate) | 6（46.2％） | |
| Audit and Supervisory Committee | Chairperson of the Committee | Full-time member of Audit and Supervisory Committee |
| The number of the committee | 4 | |
| The number of independent outside directors (rate) | 3（75%） | |
2. Skill Matrix of Outside Directors
| Name | Kaoru Hayashi | Keizo Odori | Joichi Ito | Hiroshi Shino | Masahito Okuma |
|---|---|---|---|---|---|
| Position | Representative Director | Representative Director | Director | Director | Director |
| Business Development for Our Business | ○ | ○ | ○ | ○ | ○ |
| Business Management | ○ | ○ | ○ | ○ | |
| FinTech & Payments | ○ | ○ | ○ | ○ | ○ |
| Global | ○ | ○ | ○ | ||
| Finance & Accounting | ○ | ||||
| Legal & Compliance | |||||
| Governance & Risk Management | ○ | ○ | |||
| HR, Organization & Diversity | ○ |
| Name | Mitsushi Nishida | Hironobu Moriyama | Masako Ikeda | Nanako Ishido | Yasuyuki Rokuyata |
|---|---|---|---|---|---|
| Position | Outside Director | Independent Outside Director | Independent Outside Director | Independent Outside Director | Director (Audit and Supervisory Committee Member) |
| Business Development for Our Business | ○ | ○ | |||
| Business Management | ○ | ○ | ○ | ○ | |
| FinTech & Payments | ○ | ||||
| Global | ○ | ||||
| Finance & Accounting | ○ | ||||
| Legal & Compliance | ○ | ○ | |||
| Governance & Risk Management | ○ | ○ | ○ | ||
| HR, Organization & Diversity | ○ | ○ |
| Name | Junji Inoue | Koji Makino | Shuma Uchino |
|---|---|---|---|
| Position | Independent Outside Director (Audit and Supervisory Committee Member) | Independent Outside Director (Audit and Supervisory Committee Member) | Independent Outside Director (Audit and Supervisory Committee Member) |
| Business Development for Our Business | |||
| Business Management | ○ | ○ | |
| FinTech & Payments | ○ | ||
| Global | ○ | ||
| Finance & Accounting | ○ | ○ | |
| Legal & Compliance | ○ | ||
| Governance & Risk Management | ○ | ○ | |
| HR, Organization & Diversity |
Please refer to the “Board of Directors” page for information on each director composed of the Board of Directors.
Determination Policy for Remuneration Amounts for the Company’s directors
1. Remuneration Amount for the Company’s Directors
The maximum amount of remuneration, etc. for the Company’s directors as resolved at the 21st Annual General Meeting of Shareholders held on September 29, 2016, shall be not more than 500 million yen per year (of which 50 million yen for outside directors, excluding the employees’ salaries.) Apart from this amount of remuneration, the amount of remuneration for stock acquisition rights allocated to directors (excluding directors of Audit and Supervisory Committee members, and outside directors) as stock options for stock-linked compensation shall be not more than 250 million yen per year, and the amount of remuneration for granting restricted stock allocated to directors shall be not more than 100 million yen per fiscal year in effect.
The maximum amount of remuneration for the directors (Audit and Supervisory Committee members) as resolved at the 21st Annual General Meeting of Shareholders held on September 29, 2016, shall be not more than 100 million yen per year.
| Monetary Remuneration | SO (Stock Option) | RS (Restricted Stock) | ||
|---|---|---|---|---|
| (Board of)Directors (excluding Audit and Supervisory Committee Members) | Directors excluding outside directors | within 5M JPY | within 2.5M JPY | within 1M JPY |
| Outside directors | within 50M JPY of the above-mentioned amount | – | – | |
| (Board of) Directors (Audit and Supervisory Committee Members) | within 100M JPY | – | – |
2. Calculation methods and Determination Policy of Remuneration
The Company resolved its determination policy for the details of each director’s (excluding Audit and Supervisory Committee members) remuneration, etc. at the Board of Directors Meeting based on the Company’s past operation of remuneration, etc. The amounts and details of the directors’ who are Audit and Supervisory Committee members‘ remuneration shall be determined by the Audit and Supervisory Committee through consultation, within the limits of the total amount resolved at the General Meeting of Shareholders. The following is an overview of the Company’s Remuneration Regulations regarding the amount of each director’s remuneration, etc.
(1) Significant Matters Regarding the Determination of Details of Remuneration, etc. for Each Director
The basic determination policy of the remuneration, etc. for each director is to set the ratio of stock-based compensation relatively higher to increase the linkage between directors’ compensation and the Company’s stock price, and to share with shareholders not only the benefits of a rise in the stock price but also the risks of a decline in the stock price, thereby encouraging them to contribute to enhancement of business performance and its corporate value over the short-, medium-, and long-term.
(2) Matters Regarding the Determination of Remuneration, etc. for Each Director
①Base Remuneration (Excluding Performance-linked Compensation, etc., and Non-monetary Compensation, etc.)
The following is a determination policy of the Company’s base remuneration excluding performance-linked compensation and non-monetary compensation, etc. (hereinafter referred to as “base remuneration”).
- The total amount of base remuneration shall be resolved at the General Meeting of Shareholders and decided within the limits of the settled amount.
- The base remuneration of the Company’s directors shall be monetary compensation, which amounts shall be decided based on the compositions of the ranks and the amounts determined and within the limits of the compensation amounts.
②Performance-linked compensation, etc.
The Company does not grant performance-linked compensation, etc.
③Non-monetary compensation, etc.
The following is a determination policy of the Company’s non-monetary compensation, etc. (hereinafter referred to as “stock compensation”).
- Stock compensation is composed of stock options (hereinafter referred to as “SO”) with the same value as the monetary claim of remuneration-type stock options (stock acquisition rights), in which the exercise price per share is set at 1 yen, and restricted stock (hereinafter referred to as “RS”) with the same value as the monetary claim of restricted stock. Directors receive the stock acquisition rights and restricted stock by compensating with the monetary claim of SO or RO. The gross amount of each SO and RS shall be resolved at the General Meeting of Shareholders and decided within the limits of the compensation amount and its composition established for each rank of directors determined at the Company’s Board of Directors meeting.
- The remuneration amount of SO for each director shall be calculated by multiplying the fair value of 1 stock acquisition right calculated based on the stock price, the exercise price on the allotment date, and other conditions by the total number of allotted stock acquisition rights.
- The remuneration amount of RS for each director shall be calculated by multiplying the monetary claim for 1 stock that is not too advantageous to directors who receive RS, resolved by the Company’s Board of Directors, by the number of allotted RS shares. The monetary claim for 1 stock is to be based on the closing price of the Company’s common stock on the Tokyo Stock Exchange on the previous business day of the resolution of RS grants by the Company’s Board of Directors (apply the last closing price if not decided on the market on the same day).
- RS owes transfer restrictions for the fixed period of 1 to 5 years decided by the Company’s Board of Directors, and directors shall not transfer, set up a guarantee, or execute other dispositions of RS during the period.
(3) Determination Policy of the Ratio of Base Remuneration, Performance-Based Remuneration, and Non-monetary Remuneration, etc.
①Directors excluding Outside Directors
The ratio of the base remuneration and stock compensation shall be largely 60% for the base remuneration and 40% for the stock compensation (of which, 30% for SO and 10% RS)
②Outside Directors
Only base remuneration shall be provided.
(4) Determination Policy for the Timing to Grant Remunerations, etc. or the Terms and Condition
①Base Remuneration
The compensation amount and the number of grant stocks for each director shall be resolved at the Company’s Board of Directors right after the resolution of the election of directors at the General Meeting of Shareholders, and the remuneration amount divided by the annual Remuneration by 12 shall be paid monthly from the next month of their appointment or reappointment.
②Stock Compensation
The compensation amount and number of grant stocks for each director shall be resolved at the Company’s Board of Directors right after the resolution of the election of directors at the General Meeting of Shareholders.
(5) When the Determination of Remuneration, etc., for Each Director is Entrusted to a Third Party (including re-entrusting to the Representative Director)
①Name or position entrusted to determine remuneration, etc.: President Executive Officer
②Rights to be entrusted: Regarding the decision of remuneration, etc., for each director, the President Executive Officer shall draft and submit a proposal, within the limits of the total amount of remuneration, etc. resolved at the General Meeting of Shareholders, to the Nomination and Remuneration Advisory Committee. Suppose it is resolved by the Company’s Board of Directors to entrust the determination of remuneration to the President Executive Officer with the proposal based on the advice given by the Nomination and Remuneration Advisory Committee. In that case, the President Executive Officer shall decide the remuneration, etc., for each director.
③If measures for the exercise of authority by the person in charge are to be taken, the contents shall be as follows.
- President Executive Officer shall draft and submit a proposal of remuneration, etc., for each director within the limits of the total remuneration, etc. resolved at the General Meeting of Shareholders, to the Nomination and Remuneration Advisory Committee, and shall receive the report from the Remuneration Advisory Committee.
- The Nomination and Remuneration Advisory Committee shall comprise three or more committee members, of which outside directors shall take the majority. The chairperson of the Committee shall be selected from those outside directors by the resolution of the Nomination and Remuneration Advisory Committee.
(6) Determination Method of Remuneration, etc. for Each Director
President Executive Officer shall draft and submit a remuneration proposal for each director to the Nomination and Remuneration Advisory Committee within the limits of the total remuneration, etc. resolved at the General Meeting of Shareholders, utilizing the external data, etc. President Executive Officer shall decide the remunerations, etc., based on the report received from the Nomination and Remuneration Advisory Committee.