Executive Remuneration

(1) Matters related to the policy for determining the details of remuneration, etc. for individual directors

The policy for determining the details of remuneration, etc. for individual directors (excluding audit and supervisory committee members. The same applies throughout) ecided at the board meeting held in February 2021. The details are as summarized below.

1. The policy regarding types of remuneration and their method of calculation
   The remuneration of ASAHI YUKIZAI directors is made up of a basic remuneration, a performance-based remuneration, and a trust-type stock remuneration. The performance-based remuneration is positioned as an incentive remuneration that reflects factors such as the short-term performance of the departments of which the director is in charge, and the trust-type stock remuneration is positioned as an incentive remuneration that reflects the enhancement of the Group’s medium- to long-term corporate value.
   The basic remuneration is a monetary remuneration that is not linked to performance indicators, and its amount is calculated in accordance with the rules and internal regulations established in advance by the Board of Directors, based on the position of the director and whether or not they have the right to represent the company.
   The performance-based remuneration is aone of the monetary remuneration that takes performance indicators into consideration as a factor, and its amount is calculated in accordance with the rules and internal regulations established in advance by the Board of Directors, based on an evaluation of the director for the previous fiscal year. The evaluation of each director for the previous fiscal year is based on a comprehensive consideration of the extent to which performance targets related to their duties have been achieved, and the results of initiatives aimed at resolving issues.
   Performance indicators are related to the operating profit of the business departments of which the director is in charge. The reason for selecting these performance indicators is that they are considered to be appropriate as one of the factors to be considered when evaluating the short-term performance of the departments of which the director is in charge.
   The trust-type stock remuneration is a non-monetary remuneration where shares in the company are issued. The number of shares issued is calculated in accordance with the rules established in advance by the Board of Directors, based on the position of the director and whether or not they have the right to represent the company.
2. The period during which remuneration is paid
   The yearly amount of the basic remuneration and performance-based remuneration is decided in June of each year, and one-twelfth of that amount is paid monthly from July to June of the following year. Trust-type stock remunerations are delivered when the director resigns steps down.
3. The policy regarding the ratio of the types of remuneration
   In order to ensure that performance-based remuneration and trust-type stock remuneration fully function as incentive remunerations, these remunerations shall account for a reasonable proportion of the total remuneration.

(2) Matters concerning resolutions of the general meeting of shareholders regarding remuneration, etc. for directors

It was decided at the 94th Annual General Meeting of Shareholders held on June 19, 2015 that expenditure on remuneration for directors (excluding audit and supervisory committee members) should be limited to a maximum of 300 million yen per year. There were five directors (excluding audit and supervisory committee members) when the said annual general meeting of shareholders concluded. In addition, it was decided at the 96th Annual General Meeting of Shareholders held on June 22, 2017 that stock remuneration etc. for directors (excluding part-time directors and audit and supervisory committee members) should have an upper limit of 200 million yen and should reward performance over four business years. There were five directors (excluding part-time directors and audit and supervisory committee members) when the said annual general meeting of shareholders concluded.
It was decided at the 94th Annual General Meeting of Shareholders held on June 19, 2015 that expenditure on remuneration for directors who are audit and supervisory committee members should be limited to a maximum of 60 million yen per year. There were four directors (audit and supervisory committee members) when the said annual general meeting of shareholders concluded.

(3) Matters concerning the authorization to determine the details of remuneration, etc. for individual directors

The Board of Directors authorizes President Kazuya Nakano to carry out the evaluation of each director for the previous fiscal year on the basis of which their performance-based remuneration is calculated. This is because it is more appropriate for the president, who bears ultimate responsibility for the running of the ASAHI YUKIZAI GROUP, to conduct such an evaluation from a comprehensive perspective rather than to make the decision at a Board of Directors meeting in which the appraised person themselvesf participates.
To ensure objectivity and transparency in the evaluation of each director, when the president conducts an evaluation of each director for the previous fiscal year, the draft is presented to the Audit and Supervisory Committee for its opinion, and the final evaluation is made after fully taking into account the opinions of the Audit and Supervisory Committee. Since the amount of remuneration for individual Directors has been decided through these procedures, the Board of Directors has determined that the details are in line with the decision-making policy.

(4) Total amounts of directors’ remunerations etc. for the current business year

Category	Total amounts of remunerations etc. (Million yen)	Total amounts of remunerations etc. by category ((Million yen))			No. of executives remunerated
		Basic remuneration	Performance-based remuneration etc.	Non-monetary remuneration etc.
Directors (excluding audit and supervisory committee members)	161	107	31	23	7
Directors who are audit and supervisory committee members (external directors in brackets)	45 (33)	45 (33)	- (-)	- (-)	5 (4)
Total (external directors in brackets)	206 (33)	152 (33)	31 (-)	23 (-)	12 (4)