Meetings of the Board of Directors and Corporate Officer Compensation
Meetings of Management Bodies in FYE 2022-2024
| Financial Year | Board Meetings | Governance, Nomination and Remuneration Committee | Governance and Remuneration Committee | Women’s Advancement Committee | Audit & Supervisory Board Meeting | ||
|---|---|---|---|---|---|---|---|
| FYE2024 | Number of Meetings |
17 |
3 |
2 |
2 |
14 |
|
|
Outside Directors |
100% |
100% |
100% |
100% |
- |
|
|
Outside Audit & Supervisory Board Members |
100% |
100% |
100% |
100% |
100% |
||
| Financial Year | Board Meetings | Nomination Committee | Governance and Remuneration Committee | Women’s Advancement Committee | Audit & Supervisory Board Meeting | ||
|---|---|---|---|---|---|---|---|
| FYE 2023 | Number of Meetings |
15 |
3 |
2 |
2 |
14 |
|
|
Outside Directors |
98% |
100% |
100% |
100% |
- |
|
|
Outside Audit & Supervisory Board Members |
100% |
100% |
100% |
100% |
100% |
||
| FYE 2022 | Number of Meetings |
15 |
1 |
3 |
3 |
14 |
|
|
Outside Directors |
100% |
100% |
100% |
100% |
- |
|
|
Outside Audit & Supervisory Board Members |
98% |
100% |
100% |
67% |
98% |
||
- "Number of Meetings” does not include meetings by paper circulations.
Actual Corporate Officer Remuneration for FYE 2023 and FYE2024
| FYE 2023 | FYE 2024 | |||||
|---|---|---|---|---|---|---|
| Number of people |
Amount paid (Millions of Yen) |
Details | Number of people |
Amount paid (Millions of Yen) |
Details | |
| Directors (Outside Directors) |
10 |
3,045 |
|
11 |
3,661 |
|
| Audit & Supervisory Board Members (Outside Audit & Supervisory Board Members) |
6 |
172 |
|
7 |
160 |
|
| Total (Outside Officers) |
16 |
3,216 |
18 |
3,821 |
||
- (1) Monthly Remuneration, (2) Performance-linked bonuses, (3) Share price-linked bonuses, (4) Stock Remuneration
- Monthly remuneration is decided based on the standard amount by position and the level of contribution to ITOCHU Corporation, including its response to climate change, ESG, and the SDGs.
Corporate Officer Remuneration System
ITOCHU’s remuneration plan for Directors is designed to be an incentive to grow business performance and raise ITOCHU’s stock price. Variable remuneration is approximately 82% of overall remuneration (FYE 2024), which is extremely high, even when compared to other companies. The system clarifies management’s responsibility, with Director remuneration increasing as performance improves, and significantly decreasing if performance deteriorates. Furthermore, this remuneration plan, including the calculation method, has been previously disclosed publicly, making it highly transparent.
More specifically, the remuneration plan consists of (1) monthly remuneration, (2) performance-linked bonuses, (3) share price-linked bonuses, and (4) performance-linked stock remuneration, with performance-linked bonuses reflecting short-term performance and share price-linked bonuses and performance-linked stock remuneration reflecting the increase of corporate value in the medium to long term.
We have consolidated net profit as the linked indicator for the performance-linked bonus and performance-linked stock remuneration, which is a non-monetary remuneration. Consolidated net profit is of high interest on the stock market because it is an easy-to-understand indicator of capital for growth-oriented investment and returns to shareholders, and we believe that its importance as an indicator going forward is unshakeable. In addition, employee bonuses are also linked to consolidated net profit.
To align with our shareholders and create greater awareness of increasing corporate value, we have introduced share price-linked bonuses with ITOCHU's share price as the linked indicator. This bonus is an index linked to the increase in the average daily value of ITOCHU's stock price for each consecutive two fiscal years. To ensure fairness, the calculation scheme includes the relative evaluation between the growth rate of the average value of the ITOCHU's stock price and the growth rate of the average value of the Tokyo Stock Price Index (TOPIX) for each successive two fiscal years.
| Type of remuneration | Content | Remuneration limit | Resolution of General Meeting of Shareholders | |
|---|---|---|---|---|
| Directors |
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| Audit & Supervisory Board Members |
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Formulas for Performance-linked Bonuses for Directors
In accordance with confirmed results for FYE 2025, director bonuses for FYE 2025 will be paid following the conclusion of the 101st Ordinary General Meeting of Shareholders in amounts calculated according to the methods described below (in regard to stock remuneration, points will be awarded).
Total Amount Paid to all Directors
Total amount paid to all directors = (A + B + C) x Sum of Position points for all the eligible directors/55 (but not exceeding ¥1.0billion)
A = (Of consolidated net profit for FYE 2025, for the portion up to ¥200.0 billion) × 0.35%
B = (Of consolidated net profit for FYE 2025, for the portion more than ¥200.0 billion but up to ¥300.0 billion) x 0.525%
C = (Of consolidated net profit for FYE 2025, for the portion exceeding ¥300.0 billion) × 0.35%
Amount Paid to an Individual Director
Amount paid to an individual director = Total amount paid to all directors × Assigned position points / Sum of position points for all the eligible directors
| Chairman and Chief Executive Officer | President and Chief Operating Officer | Executive Vice President | Senior Managing Executive Officer | Managing Executive Officer | Executive Officer |
|---|---|---|---|---|---|
|
10 |
7.5 |
5 |
4 |
3 |
2.2 |
Of the amount paid to an individual director, 80% of the amount paid is linked the plan achievement rate of the consolidated net profit of the assigned division/department and the rate determined by comparing the net profit of the assigned division/department in the fiscal year and that in the fiscal year prior to the fiscal year when he/she assumed the position*.
*Formula for 80% of the Amount Paid to an Individual Director :
(Total base amount paid to all Directors as above x Position Point/Sum of Position points for all the eligible Directors) x 80% x (the Rate A (defined below) determined based on plan achievement rate of the consolidated net profit target for the assigned division/department x 70% + (the Rate B (defined below) determined based on the rate determined by comparing the net profit of the assigned division/department in the fiscal year and that in the fiscal year prior to the fiscal year when he/she assumed the position) x 30%)
-The Rate A: 100% + (the plan achievement rate of the consolidated net profit target for the assigned division/department -100%) x 2 (if negative, it will be 0%. Maximum will be 200%.)
-The Rate B: 100% + (the consolidated net profit in FYE 2025 of the assigned division/department divided by the consolidated net profit in the fiscal year prior to the fiscal year when he/she assumed the position – 100%) x 2 (if negative, it will be 0%. Maximum will be 200%.)
-The assigned division of the Director whose bonuses are determined utilizing the Rate A and Rate B is the Machinery Company, while with its planned target for the FYE 2025 consolidated net profit set at ¥130.0 billion (announced on May 8, 2024).
However, for Directors who have already assumed a position in the assigned division/department as of the date of the system revision on June 13, 2023, the consolidated net profit in the fiscal year prior to the fiscal year when he/she assumed the position for the year before assuming the position shall be replaced with the consolidated net profit of the assigned division/department for FYE 2024.
-The Rate A and Rate B shall be 100% for the eligible Director for whom no plan achievement rate is measurable.
Formulas for Share price-linked Bonuses
To align with our shareholders and create greater awareness of increasing corporate value, we have introduced share-price linked bonuses with ITOCHU's share price as the linked indicator. This bonus is an index linked to the increase in the average daily value of ITOCHU's stock price for two consecutive fiscal years. To ensure fairness, the calculation scheme includes the relative evaluation between the growth rate of the average value of the ITOCHU's stock price and the growth rate of the average value of the Tokyo Stock Price Index (TOPIX) for each successive two fiscal years.
Amount Paid to an Individual Director
FYE 2025*1
= ((Average of daily closing price of ITOCHU stock from FYE 2024 to FYE 2025) – (Average of daily closing price of ITOCHU stock from FYE 2022 to FYE 2023)) × 1,300,000 × (agregated position points*2 of FYE 2024 and FYE 2025) / (108.8 points × 2)× Relative stock price growth rate*3 – Share Price-linked Bonuses of FYE 2024
- Share price-linked bonus amounts are determined and paid after the Director retires (after the Executive Officer retires, in the case of taking on the position of Executive Officer after retirement of the Director.) If the amount calculated based on the calculation formula is negative, the amount paid to an individual Director for the relevant year will be zero.
- The position points assigned to each Director are the same as those applied for calculating (2) performance-linked bonuses.
- Relative stock price growth rate = (Average of daily closing price of ITOCHU stock from FYE 2024 to FYE 2025 /Average of daily closing price of ITOCHU stock from FYE 2022 to FYE 2023) / (Average of daily TOPIX from FYE 2024 to FYE 2025 / Average of TOPIX from FYE 2022 to FYE 2023)
Share Price-linked bonuses together with performance-linked bonuses are paid to the eligible directors within the director bonuses limit of ¥3.0 billion.
Formulas for Performance-linked Stock Remuneration Plan
Points = Base points assigned to each position*1 x Calculation rate of points based on performance*2 x {(Number of months of service from July, the beginning month of the applicable period of payment, to June of the following year (rounding up fractions of less than one month)) / 12} (rounding down fractions)
- Base points assigned to each position as the Director are as per below:
- Calculation rate of points based on performance is as set forth below:
| Chairman and Chief Executive Officer | President and Chief Operating Officer | Executive Vice President | Senior Managing Executive Officer | Managing Executive Officer | Executive Officer |
|---|---|---|---|---|---|
|
31,900 |
23,900 |
16,000 |
12,800 |
9,600 |
7,000 |
（The amount of consolidated net profit attributable to ITOCHU for FYE 2025 – ¥300.0 billion） / ¥10.0 billion x 2%
We implement the clawback and malus provisions for the Performance-linked Stock Remuneration Plan. In the event that a Director is found to have committed major infractions of their duties or internal rules, or in the event that a Director resigns or is dismissed due to serious unlawful acts, etc. that warrant disciplinary action, including the occurrence of similar cases, the delivery, etc. of ITOCHU shares, etc. under the Plan shall not be conducted. If the delivery, etc. has already been conducted, ITOCHU shall be able to demand compensation from said Director of an amount, etc. obtained by multiplying the number of shares delivered under the Plan (including the number of shares converted) by the closing stock price of ITOCHU shares on the Tokyo Stock Exchange on the date on which ITOCHU provided notification of the return to said Director.