Remuneration for Directors, etc.
Following ongoing deliberations by the Compensation Committee, the Board of Directors, at its meeting held on May 2025, resolved to revise the remuneration package for Executive Directors (excluding Audit & Supervisory Committee Members), starting from FY2025.
Subsequently, at the 2025 Ordinary General Meeting of Shareholders, the resolution was adopted to determine the amount of remuneration for Eligible Directors (excluding Directors who are Audit & Supervisory Committee Members) and to introduce a stock-based remuneration system for Eligible Directors (excluding Directors who are Audit & Supervisory Committee Members).
In this review of the remuneration package for Directors, the package was designed with the aim of sharing value with its shareholders and further heightening awareness of improvement of medium- to long-term corporate value.
The new basic policy of remuneration of Directors and governance of remuneration are as follows.
The Basic policy of remuneration of Directors and Executive Officers
MC has established the Basic policy on remuneration of Directors as follows.
Remuneration levels
- Levels of remuneration are set based on the functions and roles of the Directors and Executive Officers.
The Compensation Committee(＊), where a majority of the members are one of whom serves as Committee Chairperson, continuously deliberates and monitors the policy for setting remuneration for Directors and Executive Officers, the appropriateness of remuneration levels and composition including remuneration items which are subject to the clawback policy, the operating status of the remuneration package, and other matters shall be continuously discussed and monitored by the Compensation Committee.
The primary objective of remuneration package for Executive Officers (including Executive Directors) is to be designed with the aim of sharing value with its shareholders and further heightening awareness of improvement of medium- to long-term corporate value and the following factors shall be considered.
Alignment with Strategy
KPIs shall be selected as indicators that are important in terms of management strategies, in order to link them to the remuneration package. Furthermore, remuneration levels are domestically and globally competitive and based on the functions and roles that MC is expected to assume and the status of performance achieved to motivate career growth in human resources who will be responsible for the next generation of management and to further raise organizational vitality.
Further Value Sharing with Shareholders
Stock-based Remuneration linked to Share Performance are introduced, significantly increasing the proportion of stock-based remuneration in the remuneration structure and attaching stock price conditions to it.
Strengthening Accountability
Conform to “Remuneration Governance” above
- The Chairman of the Board of Directors and Independent Directors, who do not concurrently serve as Executive Officers shall only receive fixed base salary and shall not be eligible for individual performance-linked remuneration or performance-linked bonus, as it is necessary to ensure their independence in order to properly carry out management supervision.
Decision Policy on remuneration for Directors and Executive Officers
The decision policy of remuneration for Directors and Executive Officers as well as the process for deciding the amount of remuneration (actual payment amount) involves deliberation by the Compensation Committee followed by a resolution by the Board of Directors.
The respective policies for determining the content of individual remuneration for Directors are as follows:
① Remuneration Governance for Executive Officers (including Executive Directors)
- The total remuneration amount (actual payment amount) and individual payment amounts for Executive Directors, excluding Individual Performance-linked Remuneration, are determined by a resolution of the Board of Directors within the upper limits for each type of remuneration decided by resolution of the 2025 Ordinary General Meeting of Shareholders held on June 20, 2025.
- Base salary of fixed remuneration is paid in amounts determined by the Board of Directors.
- As for variable remuneration, payments of Performance-linked Bonus and Stock-based Remuneration linked to Share Performance are determined, while reflecting key performance indicators, based on a formula set by the Board of Directors following deliberation by the Compensation Committee.
- The payment amounts of Individual Performance-linked Remuneration for Executive Directors based on their individual performance assessment, including qualitative assessment, are determined and paid on an individual basis, reflecting the President’s yearly assessment of performance in both financial and non-financial terms of each Director for the relevant fiscal year (it is appropriate that yearly assessment is conducted by the President who is the Chief Executive Officer of the Company and therefore the Board of Directors delegates authority to the President for deciding the individual payment amounts). Performance evaluations of Executive Directors comprehensively take into account their contributions to the organizations and businesses they oversee; their contributions to management of the entire Company, Corporate Staff Section, Business Groups and offices; and the initiatives related to value creation that leads to sustainable growth. The annual assessment on the President’s performance is decided by the Compensation Committee (all Independent Directors (including Directors who are Audit & Supervisory Committee Members) also participate in deliberations and decisions.) to which this authority has been delegated by the Board of Directors.
Results of the performance assessment are reported to the Board of Directors and the Compensation Committee to ensure objectivity, fairness and transparency.
- Based on the policy for determining remuneration packages (including methods for calculating performance-linked bonus) that was approved at the meeting of the Board of Directors held on May 2, 2025, each year, the Compensation Committee deliberates and the Board of Directors makes a resolution determining that the total amount of Directors remuneration packages and methods for deciding payments to individual directors are consistent with said policy for determining remuneration packages.
- MC has adopted a clawback policy, applicable to the Individual Performance-linked Remuneration, Performance-linked Bonus and Stock-based Remuneration linked to Share Performance of Executive Directors.
- Each year, the Compensation Committee deliberates and monitors the appropriateness of remuneration levels and composition (including components of remuneration subject to clawback policy) as well as the operational status of remuneration systems. This is carried out with with reference to data on remuneration levels and composition ratios provided by an external consulting firm (Willis Towers Watson).
② Remuneration Governance for Non-Executive Directors (excluding Directors who are Audit and Supervisory Committee Members)
- The content of individual remuneration for the Chairman of the Board and Independent Directors (excluding Directors who are Audit and Supervisory Committee Members) is deliberated by the Compensation Committee and decided by the Board of Directors.
③ Remuneration Governance for Directors who are Audit and Supervisory Committee Members
- The total and individual amounts of remuneration for Directors who are Audit & Supervisory Committee Members are determined following deliberations by the Directors who are Audit & Supervisory Committee Members within the upper limits of remuneration for the Directors who are Audit & Supervisory Committee Members approved at the 2024 Ordinary General Meeting of Shareholders held on June 21, 2024.
Remuneration Package for Directors (from FY2025)
The amount of remuneration for Directors (excluding Directors who are Audit & Supervisory Committee Members) was resolved at the 2025 Ordinary General Meeting of Shareholders, as described in (①) and (②) below. the number of Directors (excluding Directors who are Audit & Supervisory Committee Members) subject to this remuneration is 10, including 4 Independent Directors.
- ①The total annual amount for base salary and individual performance-linked remuneration shall be up to 1.8 billion yen per year (For the base salary paid to Independent Directors, up to 250 million yen per year).
- ②The annual amount for performance-linked bonuses that reflects the profit over a single fiscal year shall be up to 1 billion yen per year. (The amount paid is adjusted in line with the results of evaluations of underlying cash flows, ROE, and initiatives related to sustainability factors and calculated according to the formula resolved by the Board of Directors. An upper limit is also placed on the total amount to be paid.)
Remuneration for each Director (excluding Directors who are Audit & Supervisory Committee Members) shall be determined through a process of deliberation and decision-making process by the Board of Directors and the Compensation Committee within the upper limit.
In the event of a material revision of financial statements, etc., due to the execution of duties by Directors, MC may demand that such Directors shall not be paid or that they return money (malus and clawback) for the individual performance-linked remuneration and performance-linked bonuses.Each item of remuneration marked with(＊) is subject to clawback policy.
Annual deferment for retirement remuneration under the past remuneration package until FY 2024 will not be accumulated for FY2025 and thereafter, and the accumulated amount up to FY 2024 will be calculated and paid upon resolution of the Board of Directors at the time of retirement from office as a Director who is in charge of business execution.
Performance-linked bonuses (medium- to long- term) will also be abolished from FY2025 and individual performance-linked remuneration, performance-linked bonuses (short-term), performance-linked bonuses (medium- to long- term) and stock-based remuneration linked to medium- to long-term share performances for past fiscal years will continue to be vested and paid based on the basic approach, remuneration governance and package for Directors, etc. for each fiscal year.
From FY2025 onward, upon resolution at the 2025 Ordinary General Meeting of Shareholders, while the stock-based remuneration linked to medium- to long-term share performances was abolished, a new stock-based remuneration linked to share performances using trust scheme up to 1.7 billion yen per year has been introduced for Eligible Directors, with the aim of sharing value with its shareholders and further heightening awareness of improvement of medium-to-long term corporate value. The number of Eligible Directors subject to the remuneration was 5. From FY2025 MC shall not issue stock acquisition rights as medium- to long-term share performance-linked remuneration for Executive Directors, but the stock acquisition rights already issued shall continue to exist.
Regarding the amount of remuneration for Directors who are members of the Audit and Supervisory Committee shall be no more than 450 million yen per year, which was resolved at the 2024 Ordinary General Meeting of Shareholders. The number of directors who are members of the Audit and Supervisory Committee subject to the remuneration was 5, including 3 Independent Directors.
Calculation Method for Performance-Linked Remuneration
- The amount paid is determined based on the underlying operating cash flows for a single fiscal year, using formulas approved by the Board of Directors following deliberation by the Compensation Committee. However, if the net income is zero or there is a net loss, the amount paid shall also be zero, regardless of the amount of the underlying operating cash flows. In addition, if ROE falls below the level set by the Board of Directors, the amount be paid shall be reduced.
- In addition, the amount varies in accordance with the results of evaluations of initiatives related to sustainability factors. These evaluations are carried out by the Compensation Committee, which comprehensively examines initiatives over the relevant single year, while also considering the long-term impact in both quantitative and qualitative impact. The evaluation results are reported to the Board of Directors.
Calculation and Maximum Payment and Total for Each Position in FY2025
Stock-Based Remuneration linked to Share Performance
Stock-Based Remuneration linked to Share Performance in the package of remuneration is as follows.
（1）Overview of the Plan
MC contributes funds to the Trust (hereinafter referred to as “Trust Fund”), which then acquires shares of MC stock (hereinafter referred to as “MC Shares”) and delivers or transfers (hereinafter referred to as “Delivered, etc.”) MC Shares or its monetary equivalent to the converted value of such shares (hereinafter referred to as “MC Shares, etc.”) through the Trust as remuneration to Directors in accordance with their positions, the degree of achievement of targets, and other criteria.
① Eligible persons to whom the MC Shares, etc. is to be delivered, etc. covered by this proposal
Eligible Directors. The Chairman of the Board of Directors and Independent Directors, who do not concurrently serve as Executive Officers are ineligible for payment in light of their roles.
② Upper limit of the Trust Fund
1.7 billion yen multiplied by the number of fiscal years in the target period. For the initial target period, 5.1 billion yen for the three fiscal years ending March 31, 2028.
③ Upper limit of MC Shares to be delivered to the Eligible Directors and the method of acquisition of MC Shares.
1.4 million shares multiplied by the number of fiscal years during the target period. For the initial target period, 4.2 million shares for the three fiscal years ending March 31, 2028.
The ratio of the above number of shares per fiscal year (1.4 million shares) to the total number of shares issued by MC (as of March 31, 2025, net of treasury stock) is approximately 0.03%
MC Shares will be acquired by the Trust through the issuance of new shares as a third-party allotment or disposal of treasury stock by MC to the Trust, or from the stock market through the Trust.
④ Calculation method of the number of MC Shares, etc. to be Delivered, etc. to Eligible Directors
This will fluctuate within a certain range depending on the achievement level of performance. The achievement level of the performance during the initial target period will be calculated by dividing the Company’s Total Shareholder Return(hereinafter referred to as “TSR”) during the initial target period by the growth rate of the Tokyo Stock Price Index with dividends (hereinafter referred to as “TOPIX Total Return Index”) during that period.
⑤ Timing of MC Shares, etc. to be Delivered, etc. to Eligible Directors
In principle, after the end of the target period.
（2）Upper limit of the Trust Fund
This Plan, in principle, cover three fiscal years, with the initial target period being the three fiscal years ending on March 31, 2028.
MC shall set an upper limit of 1.7 billion yen multiplied by the number of fiscal years in the target period as the maximum amount of the Trust Fund and establish a trust (the “Trust”) for the term corresponding to the target period with Eligible Directors who satisfy the requirements as the beneficiaries.
In accordance with the instructions of the trustee, the Trust will acquire MC Shares through the Trust, using the Trust Fund as the source of funds. MC shall grant points to Eligible Directors as set forth in (3) below, and MC Shares, etc. shall be Delivered, etc. by the Trust equivalent to the number of points granted at a pre-determined time. The Trust may be continued at the expiration of the Trust period by amending the trust agreement and making additional contributions to the Trust. In such cases, in principle, three fiscal years will become the new target period, and the Trust term will be extended for the period corresponding to the new target period. MC will make additional contributions to the Trust for each such extended period within the scope approved by resolution at this General Meeting of Shareholders regarding the Trust Fund and continue granting points to Eligible Directors and making MC Shares, etc. to be Delivered, etc. for the new target period. However, in the case of making such an additional contribution, if there are any remaining MC Shares (excluding MC Shares equivalent to the points granted to Eligible Directors that has yet to be Delivered, etc.) and funds in the Trust property (hereinafter collectively with MC Shares, the “Residual Shares, etc.”) at the final day of the trust period prior to the extension, the sum of the amounts of the Residual Shares, etc. to be Delivered, etc. to Eligible Directors and the Trust Fund necessary to be additionally contributed shall be within the scope approved by resolution at this General Meeting of Shareholders.
Such extension of the trust period is not limited to once, and the trust period may be extended again in the same manner thereafter.
（3）Calculation method and upper limit of the number of MC Shares, etc. to be Delivered, etc. to Eligible Directors
The number of MC Shares, etc. to be Delivered, etc. to Eligible Directors shall be determined based on “Share Delivery Points.” One MC Share per point or a payment of money equivalent to the converted value of one MC Share shall be Delivered, etc., with fractions less than one point rounded down. However, if a share split of MC Shares or a reverse share split of its shares occurs during the Trust period, MC will adjust the number of the MC Shares per Share Delivery Point and the upper limit on the number of shares and a payment of money equivalent to the converted value of such shares to be Delivered, etc. according to the split or reverse split ratio. Share Delivery Point shall be calculated as follows:
Each fiscal year, points are allocated to Eligible Directors according to their position. After the elapse of the target period, the points allocated to Eligible Directors are multiplied by a performance-based coefficient(＊) according to the degree of achievement of the performance and some other factors to calculate the number of performance-based points and determine the number of Share Delivery Points. Even if an Eligible Director who meets the beneficiary requirements resigns during the target period, the number of performance-based points will be calculated according to the performance-based coefficient after the target period ends, to determine the number of Share Delivery Points.
The upper limit of MC Shares, etc. to be Delivered, etc. (the number of points to be granted to the Eligible Directors) during the Trust period shall be 1.4 million shares multiplied by the number of fiscal years during the target period. In consideration of the aforementioned upper limit of Trust Fund, the maximum number of MC Shares, etc. to be Delivered, etc. to Eligible Directors is set with reference to information such as the share price at present and other factors.
（4）Method and timing of Delivery, etc. of MC Shares, etc. to Eligible Directors
The Eligible Directors who meet the beneficiary requirements shall, after the elapse of the target period, receive a Delivery, etc. of MC Shares, etc. from the Trust in the number equivalent to the number of Share Delivery Points retained, by taking prescribed beneficiary identification procedures.
At that time, said Eligible Directors shall receive a delivery of MC Shares in a certain ratio of such Share Delivery Points, and MC Shares equivalent to the remaining points will be converted into cash within the Trust, and said Eligible Directors shall receive a payment of money equivalent to the converted value of such shares. In addition, Eligible Directors who are determined to be non-residents of Japan shall receive from MC an amount calculated by multiplying the number of Share Delivery Points calculated and determined after the elapse of the target period by the share price of MC Shares at the time of payment for the number of points held at that time. If it becomes difficult to pay the amount of money equivalent to the converted value of such shares by the Trust for some reason, MC may pay an amount equivalent to the converted value (hereinafter referred to as the “cash plan”). The total number of points (hereinafter referred to as the “cash plan points”) that are the basis for calculating the amount of payment to Eligible Directors under the cash plan and the number of MC shares (including shares subject to conversion into cash) to be Delivered, etc. to Eligible Directors shall be up to the number of shares calculated by multiplying1.4 million shares by the number of fiscal years of the target period, and the amount paid shall be calculated by multiplying the number of cash plan points by the market share price at the time of payment.
In addition, if an Eligible Director were to die, all MC Shares in the number equivalent to the Share Delivery Points awarded up to that time will be converted into cash within the Trust, and an heir to said Eligible Director shall receive a payment of money equivalent to the converted value of such shares.
（5）Malus and clawback policy
In the event of a material revision to financial statements, etc., due to the execution of duties by an Eligible Director, MC may demand that such Director forfeit the beneficial interest in MC Shares, etc. to be Delivered, etc. (malus) or demand the return of MC Shares, etc. that was Delivered, etc. (clawback).
（6）Exercise of voting rights related to MC Shares held by the Trust
To ensure the neutrality of management, voting rights of MC Shares held by the Trust shall not be exercised during the Trust period.
（7）Treatment of dividends on MC Shares held by the Trust
Dividend for MC Shares held by the Trust will be received by the Trust and used for trust fees and trust expenses of the Trust.
（8）Other details of this Plan
Other details regarding this Plan shall be resolved by the Board of Directors each time the Trust is established, the trust agreement is amended, or additional contributions are made to the Trust.
Guideline for Share Ownership (Policy)
MC sets the guideline for share ownership. Under the guideline is that Executive Directors and Executive Officers are obliged to hold any shares while in office. Sales of such shares are restricted until their aggregate market value exceeds approximately 300% (500% for the President and CEO) of the base salary of each position.
Deliberation Process Regarding the Revision of Remuneration Package for Executive Directors and Executive Officers
MC resolved to revise the remuneration package for Executive Directors and Executive Officers following ongoing deliberations by the Board of Directors and the Compensation Committee. The specific review process is as follows.
October 2024, the Compensation Committee
- The Compensation Committee discussed the basic design (grand design) proposal for the new remuneration package for Executive Officers (including Executive Officers who are Directors)
January 2025, the Compensation Committee
- The Compensation Committee discussed the detailed proposal for the new remuneration package for Executive Officers
March 2025, the Compensation Committee
- The Compensation Committee discussed the final proposal, including the disclosure plan for the new remuneration package for Executive Officers
May 2025, the Board of Directors’ Meeting
- The Board of Directors resolved to revise the remuneration package (including basic policy and remuneration governance) for Executive Directors, including the remuneration package for Executive officers FY 2025.
June 2025, 2025 Ordinary General Meeting of Shareholders
- The General Meeting of Shareholders resolved to determine the amount of remuneration for Eligible Directors (excluding Directors who are Audit & Supervisory Committee Members) and to introduce a stock-based remuneration system for Eligible Directors (excluding Directors who are Audit & Supervisory Committee Members)
Directors’ and Audit & Supervisory Board Members’(＊) Remuneration: Total Amounts and Number of Eligible Persons
Please check the link below for data on Directors’ and Audit & Supervisory Board Members’(＊) Remuneration: Total Amounts and Number of Eligible Persons in the Fiscal.
Names, Titles, Total Amounts of Consolidated Remuneration and Amount by Type of Remuneration for Each Director and Audit & Supervisory Board Member(＊)
Please check the link below for data on Names, Titles, Total Amounts of Consolidated Remuneration and Amount by Type of Remuneration for Each Director and Audit & Supervisory Board Member(＊).
Significant Employee Salaries of Directors Concurrently as Employees
None of MC’s Directors serve concurrently as employees.
Employee Salaries
MC has a performance-linked bonus system for non-executive employees, including some fixed-term contract employees.