Policies and Procedures for Determining the Remuneration for Corporate Officers
Method for Deciding Policies
At Prestige International, policies regarding the remuneration for corporate officers are determined by the Board of Directors. If corporate officers other than outside directors receive remuneration from an enterprise other than Prestige International Inc., the total amount of remuneration is determined by subtracting the external amount of remuneration from the amount of remuneration from our company.
Process for Deciding Remuneration
The remuneration for individual Prestige International directors is determined by the Board of Directors based on the recommendations in the report compiled by the Nomination and Remuneration Committee, which is an advisory body to the Prestige International’s Board of Directors.
Nomination and Remuneration Committee
In order to strengthen the fairness, transparency, and objectivity of procedures regarding nomination and remuneration, as well as further enhance corporate governance, Prestige International has established a voluntary Nomination and Remuneration Committee to act as an advisory body to the Board of Directors. The committee comprises 3 or more executive members, the majority of whom must be independent officers in order to increase independence and objectivity. In FY2024.3, the committee comprises four members (2 outside directors, 1 outside auditors, and the corporate CEO). Furthermore, as a general rule, the committee chair is elected from among the independent officers on the Board of Directors.
In response to questions from directors, the Nomination and Remuneration Committee deliberates mainly on the following items and reports back to the Board of Directors.
- Items related to the nomination or dismissal of directors, auditors, executive officers, and other important officers of Prestige International Group (hereinafter referred to collectively as “Corporate Officers”)
- Items related to the remuneration of Corporate officers
- Items related to corporate officer succession plans
- Other important items related to the Prestige Group
Remuneration Content
| Category |
Fixed remuneration |
Performance-linked remuneration |
Non-monetary remuneration
(restricted stock) |
| Internal director |
〇 |
〇 |
〇 |
| Employee-director |
〇 |
|
〇 |
| Outside director |
〇 |
|
|
* 〇 indicates that remuneration applies
Calculation Methods
Fixed Remuneration
Fixed remuneration is determined based on performance trends, business creation and other management results, the scope of supervision, and the contribution to the realization of the Group Philosophy, based on the reference table within the scope of total remuneration.
Performance-linked Remuneration
Performance-linked remuneration is adopted for internal Director who are responsible for executing management in order to link Director remuneration with shareholder income.
In order to reflect management performance in the evaluation, the Company comprehensively evaluates the status of governance, business creation, and other management results based on the ratio of achievement of consolidated operating income to the consolidated operating income budget at the beginning of the period, and determines within the range of 0 to 4 months equivalent to the standard of 2 months equivalent of fixed compensation.
In principle, the Company will pay restricted stock awards.
The consolidated operating income achievement rate for FY2023.3 (used for calculating remuneration) is shown in the table below.
Non-monetary Remuneration
In addition to providing incentives for the sustainable improvement of corporate value, the Company has adopted a system in which the portion equivalent to performance-linked compensation is in principle paid as restricted stock awards, and the amount of fixed compensation can be allocated to the amount of cash compensation and restricted stock awards at its own discretion, with the aim of promoting further value sharing with shareholder. Under this restricted stock system, corporate officers are paid monetary remuneration claims applied to contributions in kind pertaining to the issuance or disposal with the payment per share determined on the basis of the closing price for Prestige International’s common stock at the Tokyo Stock Exchange on the business day prior to the day of each Board of Directors’ resolution. The Board of Directors specifies the payment period and distribution for each eligible director.