Meetings of the Board of Directors and Corporate Officer Compensation

Results in FYE 2018 under the corporate governance system explained on the previous pages include the following.

Meetings of Management Bodies in FYE 2018

 

FYE2016

FYE2017

FYE2018

Board of Directors

16times

16times

15times

Outside director attendance at Board of Directors' meetings

100%

98%

100%

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

91%

94%

98%

Board of Audit & Supervisory Board Members

15times

12times

14times

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

95%

94%

98%

Actual Corporate Officer Compensation for FYE2018

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

9
(4)

1,431
(45)

  • (1) Monthly remuneration ¥501 million
  • (2) Bonuses ¥687 million
  • (3) Special Bonuses ¥166 million
  • (4) Stock remuneration ¥76 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)

6
(4)

115
(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)

15
(8)

1,546
(81)

   
  • In response to fiscal 2018 consolidated net profit attributable to ITOCHU of ¥400.3 billion, an amount exceeding the ¥400.0 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 February 2, 2018, after being examined by the Governance and Remuneration Committee. 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.

FYE 2019 Corporate Officer Compensation System

Compensation paid to all directors of the Company (excluding outside directors) consists of (1)monthly remuneration, (2)performance-linked bonuses, (3)market capitalization-linked bonuses and (4)performance-linked stock remuneration. The monthly remuneration is determined by contribution to the Company of each director based on the base amount set by its position, while the total amount of the performance-linked bonuses and the performance-linked stock remuneration are determined based on consolidated net profit attributable to the Company for then-current fiscal year. Furthermore, the total amount of the market capitalization-linked bonus is determined based upon the increased amount of the Company’s market capitalization as compared to the last fiscal year.

Type of remuneration Content Remuneration limit Resolution of General Meeting of Shareholders
Directors
  • (1)Monthly remuneration
  • 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) Performance-linked 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) Market capitalization-linked bonuses
  • Determination of total payment amount on the basis of the company's market capitalization Refer to the formula below
  • (4) Performance-linked stock remuneration
  • Determination of total payment amount on the basis of net profit attributable to ITOCHU Refer to the formula below
  • 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 2019, director bonuses for fiscal 2019 will be paid in amounts calculated according to the methods described below, and following the conclusion of the 95th 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 FYE2019, for the portion up to ¥200.0 billion) × 0.35%
  B = (Of net profit attributable to ITOCHU for FYE2019, for the portion more than ¥200.0 billion but up to ¥300.0 billion) x 0.525%
  C = (Of net profit attributable to ITOCHU for FYE2019, for the portion exceeding ¥300.0 billion) × 0.525% (0.175% for stock remuneration)

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
Points

10

7.5

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 addition, 70% of the amount paid in cash is linked the plan achievement rate of the consolidated net profit of the assigned division/department. (The plan achievement rate shall be 100% for the eligible director for whom no plan achievement rate is measurable.)
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.

Formulas for Market Capitalization-liked Bonuses

By resolution of Board of Directors held on February 2, 2018 and for the purpose of the incentive towards increasing the Company’s corporate value, ITOCHU introduced the bonus structure which is linked to the increased amount of the Company’s market capitalization as compared to the last fiscal year. Director market capitalization-linked bonuses for FY2019 will be paid in amounts calculated according to the methods described below.

Amount Paid to an Individual Director

The amount paid to an individual director = (the average daily market capitalization of the Company in FY2019-the average market capitalization of the Company in FY2018) x 0.1% x Position Point / 108.8

The points assigned to each position are same as those applied for performance-linked bonuses.Market capitalization-linked bonuses together with performance-linked bonuses are paid to the eligible directors within the director bonuses limit of ¥1billion.