Meetings of the Board of Directors and Corporate Officer Compensation

Results in FYE 2017 under the corporate governance system explained on the previous pages include the following.

Meetings of Management Bodies in FYE 2017

 

FYE2015

FYE2016

FYE2017

Board of Directors

20times

16times

16times

Outside director attendance at Board of Directors' meetings

95%

100%

98%

Outside audit & supervisory board member attendance at Board of Directors' meetings

93%

91%

94%

Board of Audit & Supervisory Board Members

14times

15times

12times

Outside audit & supervisory board member attendance at Board of Audit & Supervisory Board Members' meetings

94%

95%

94%

Actual Corporate Officer Compensation for FYE2017

Type Number
of
people
Amount paid
(Millions of Yen)
Details Maximum compensation paid
Directors
(Outside directors)

15
(3)

1,877
(33)

  • (1) Monthly remuneration ¥832 million
  • (2) Bonuses ¥593 million
  • (3) Special Bonuses ¥389 million
  • (4) Stock remuneration ¥62 million
  • (1) ¥1.2 billion per year as total monthly compensation
    (including ¥50 million per year as a portion to the outside directors)
  • (2) ¥1.0 billion per year as total bonuses paid to all directors (excluding outside directors)
    (Both (1) and (2) were resolved at the General Meeting of Shareholders on June 24, 2011)
Corporate auditors
(Outside corporate auditors)

5
(3)

107
(36)

  • (1) Only monthly compensation
  • (1) ¥13 million per month
    (Resolved at the General Meeting of Shareholders on June 29, 2005)
Total
(Outside directors and audit & supervisory board members)

20
(6)

1,984
(69)

   
  • In response to fiscal 2016 consolidated net profit attributable to ITOCHU of ¥352.2 billion, an amount exceeding the ¥350.0 billion forecast for the full year and a record high for the company, ITOCHU Corporation has decided to pay a special bonus. This bonus is in accordance with the resolution of the Board of Directors held on January 19, 2017, after being examined by the Governance and Remuneration Committee, and it is to be paid for the purpose of providing incentive to further expanding ITOCHU Corporation’s operating performance. The amount of special bonus paid shall be inside a range whereby the amount of special bonus and director bonus does not exceed the bonus limit (¥1 billion per year).
  • The retirement benefits system for directors and corporate auditors was abolished on the date of the 81st Ordinary General Meeting of Shareholders held on June 29, 2005, and it was resolved that directors and corporate auditors retaining their positions after the conclusion of the said General Meeting of Shareholders shall be presented with retirement benefits on the date of their retirement for the period up to the time the retirement benefits system was abolished. Based on this, in addition to the payment amounts above, an ¥80 million retirement benefit was paid in July 2016 to one director who retired during this fiscal year.

FYE 2018 Corporate Officer Compensation System

Based on a Board of Directors resolution at a meeting held on January 19, 2017, following the deliberations at the Governance and Remuneration Committee, the Company revised the former bonus system for directors (excluding outside directors), to a bonus system under which a performance-linked proportion of total bonus is increased.
The compensation paid to all directors of ITOCHU (excluding outside directors) consists of (i) monthly compensation, (ii) performance-linked bonuses, and (iii) performance-linked and share-based remuneration (trust type), which was newly introduced from FYE 2017. The total amount of (i) monthly compensation is determined by the contribution to ITOCHU of each director according to a base amount set by position, whereas the total amount of (ii) performance-linked bonuses and (iii) performance-linked and share-based remuneration is determined based on consolidated net profit attributable to ITOCHU. The performance-linked and share-based remuneration was introduced from FYE 2017 with the aim of heightening awareness toward making contributions to improving our performance over the medium and long term and to increasing corporate value. As a result of the introduction of this share-based remuneration plan, with respect only to the consolidated net profit attributable to ITOCHU exceeding ¥300 billion, 50% of the amount of bonus that would be calculated under the formula for the current performance-linked bonus will be paid by means of share-based remuneration in lieu of bonus in cash. Only monthly compensation is paid to the outside directors and bonuses and performance-linked and share-based remuneration are not paid thereto.

Type of remuneration Content Remuneration limit Resolution of General Meeting of Shareholders
Directors
  • (1)Monthly compensation
  • Monthly compensation determined by the contribution to ITOCHU of each director according to a base amount set by position
  • ¥1.2 billion per year as total monthly compensation (including ¥50 million per year as a portion to the outside directors)
  • June 24, 2011
  • (2) Bonuses
  • Determination of total payment amount on the basis of net profit attributable to ITOCHU Refer to the formula below
  • ¥1.0 billion per year as total bonuses paid to all directors (excluding outside directors)
  • (3) Share-based remuneration
    (trust type)
    FYE 2017 introduction
  • The following is the limit for a two-year period for directors and executive officers
    •Upper limit for contribution to trust from ITOCHU: ¥1.5 billion
    •Total points awarded to persons eligible for the plan: 1.3 million points (conversion at 1 point = 1 share)
  • June 24, 2016
Corporate Auditors
  • Only monthly
    compensation
  • ¥13 million per month
  • June 29, 2005

Formulas for Performance-linked Bonuses and Share-based Remuneration

In accordance with confirmed results for FYE 2018, director bonuses for fiscal 2018 will be paid in amounts calculated according to the methods described below, and following the conclusion of the 94th Ordinary General Meeting of Shareholders (in regard to share-based 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 net profit attributable to ITOCHU for FYE2018, for the portion up to ¥200.0 billion) × 0.35%
  B = (Of net profit attributable to ITOCHU for FYE2018, for the portion more than ¥200.0 billion but up to ¥300.0 billion) x 0.525%
  B = (Of net profit attributable to ITOCHU for FYE2018, for the portion exceeding ¥300.0 billion) × 0.525% (0.175% for stock remuneration)

The total amount paid to all directors shall be the lesser of (A) 0.35% of the amount of consolidated net profit attributable to the Company, for the fiscal ended March 31, 2018 [such amount as provided in the 94th Annual Securities Report (yuka shoken hokokusho)] for the portion up to ¥200.0 billion, plus (B) 0.525% of the amount of consolidated net profit attributable to the Company, for the fiscal ending March 31, 2018 [such amount as provided in the 94th Annual Securities Report (yuka shoken hokokusho)] for the portion more than ¥200.0 billion but up to ¥300.0 billion and (C) 0.525% of the amount of consolidated net profit attributable to the Company, for the fiscal ending March 31, 2018 [such amount as provided in the 94th Annual Securities Report (yuka shoken hokokusho)] for the portion exceeding ¥300.0 billion (amount of less than ¥1 shall be rounded down), which shall be adjusted with due regard to the increase/decrease in the number of eligible directors and the change in position and other factors.

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 President &
Chief Executive Office
Executive Vice President Senior Managing Executive Officer Managing Executive Officer
Points

10

5

4

3

Of the amount paid to an individual director, the portion corresponding to A and B in the total amount paid to all directors is paid entirely in cash. In regard to the portion corresponding to C, the portion of 0.175% is paid as share-based stock remuneration and the rest paid in cash. In regard to share-based remuneration during the term of office, annual points are awarded (1 point = 1 share), and at the time of retirement share-based remuneration is paid from the trust in correspondence with accumulated points. Plans call for all of the shares paid from the trust to be acquired on the stock market, and accordingly there will be no dilution of shares.