Meetings of the Board of Directors and Corporate Officer Compensation
Meetings of Management Bodies in FYE 2021-2023
| Financial Year | Board Meetings | Nomination Committee | Governance and Remuneration Committee | Women’s Advancement Committee | Audit & Supervisory Board Meeting | ||
|---|---|---|---|---|---|---|---|
| FYE2023 | Number of Meetings |
15 |
3 |
2 |
2 |
14 |
|
|
Outside Directors |
98% |
100% |
100% |
100% |
- |
|
|
Outside Audit & Supervisory Board Members |
100% |
100% |
100% |
100% |
100% |
||
| FYE2022 | Number of Meetings |
15 |
1 |
3 |
3 |
14 |
|
|
Outside Directors |
100% |
100% |
100% |
100% |
- |
|
|
Outside Audit & Supervisory Board Members |
98% |
100% |
100% |
67% |
98% |
||
| FYE2021 | Number of Meetings |
12 |
4 |
1 |
- |
14 |
|
|
Outside Directors |
100% |
100% |
100% |
- |
- |
|
|
Outside Audit & Supervisory Board Members |
100% |
100% |
100% |
- |
100% |
||
- "Number of Meetings” does not include meetings by paper circulations.
Actual Corporate Officer Remuneration for FYE 2022 and FYE2023
| FYE2022 | FYE2023 | |||||
|---|---|---|---|---|---|---|
| Number of people | Amount paid (Millions of Yen) | Details | Number of people | Amount paid (Millions of Yen) | Details | |
| Directors (Outside Directors) |
12 |
3,692 |
|
10 |
3,045 |
|
| Audit & Supervisory Board Members (Outside Audit & Supervisory Board Members) |
6 |
152 |
|
6 |
172 |
|
| Total (Outside Officers) |
18 |
3,844 |
16 |
3,216 |
||
- (1) Monthly Remuneration, (2) Performance-linked bonuses, (3) Share price-linked bonuses, (4) Special Benefits, (5) 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. Variable remuneration is approximately 80% of overall remuneration (FYE 2023), 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.
![[写真]](/en/img/remunerationplan-e.png)
| 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 and Stock Remuneration
In accordance with confirmed results for FYE 2024, director bonuses for FYE 2024 will be paid following the conclusion of the 100th 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 2024, for the portion up to ¥200.0 billion) × 0.35%
B = (Of consolidated net profit for FYE 2024, for the portion more than ¥200.0 billion but up to ¥300.0 billion) x 0.525%
C = (Of consolidated net profit for FYE 2024, 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 | Executive Officer |
|---|---|---|---|---|---|
|
10 |
7.5 |
5 |
4 |
3 |
2.2 |
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, 80% of the amount paid in cash is linked the plan achievement rate of the consolidated net profit of the assigned division/department and the rate determined based on the comparison with the consolidated net profit of the previous fiscal year*. 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.
*Formula for 80% of the Amount Paid in cash 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 50%
-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 plan achievement rate 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
(i) FYE2024*1
= ((Simple average of daily closing price of ITOCHU stock in FYE 2024) – (Simple average of daily closing price of ITOCHU stock from FYE 2022 to FYE 2023)) × 1,300,000 × (Position points*2 of FYE 2024) / (108.8 points) × Relative stock price growth rate*3 × 1/2
(ii) FYE2025*1
= ((Simple average of daily closing price of ITOCHU stock from FYE 2024 to FYE 2025) – (Simple average of daily closing price of ITOCHU stock from FYE 2022 to FYE 2023)) × 1,300,000 × (Total position points*2 of FYE 2024 and FYE 2025) / (108.8 points × 2)× Relative stock price growth rate*4 – Share Price-linked Bonuses of FYE 2024
- Share price-linked bonus amounts are determined and paid after the Director retires (after the Executive Of cer 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 = (Simple average of daily closing price of ITOCHU stock in FYE 2024 / Simple average of daily closing price of ITOCHU stock from FYE 2022 to FYE 2023) / (Simple average of daily TOPIX in FYE 2024 / Simple average of daily TOPIX from FYE 2022 to FYE 2023)
- Relative stock price growth rate = (Simple average of daily closing price of ITOCHU stock from FYE 2024 to FYE 2025 / Simple average of daily closing price of ITOCHU stock from FYE 2022 to FYE 2023) / (Simple average of daily TOPIX from FYE 2024 to FYE 2025 / Simple 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.