Corporate Governance​​

Compensation Policy for Directors and Managers

The salary and compensation for the Company’s Directors and managers are determined by the Compensation Committee in its regular evaluations based on the Compensation Committee Charter. The performance evaluation and the salary and remuneration of the Directors and managers are based on prevailing rates of the industry as well as their individual performance, the Company’s overall performance, and reasonable assessments of future risks.

The managers’ remuneration includes fixed salary and performance-based floating salary. The performance evaluation includes financial indicators as well as ESG indicators. They include environmental targets such as energy management (e.g., quantity of electricity saved), water resources (e.g., process water recycling rate), and waste management (e.g., waste chemical recycling rate); economic targets such as information security (e.g., information security accidents), innovation management (e.g., patents), and customer service and management (e.g., customer satisfaction); social targets such as talent attraction and retention (e.g., turnover rate) and environmental safety and health (e.g., number of occupational safety accidents).

According to the Company’s Articles of Incorporation, before the Company distributes earnings, it shall set aside no more than 2% of the profit from the period of distribution as remuneration for Directors and no less than 1% as remuneration for employees. However, if the Company has accumulated losses, the Company shall set aside a part of the profit to make up for the losses. The distribution of employee remuneration shall be resolved by a majority vote at a board meeting attended by more than two thirds of the Directors and it shall be reported at the shareholders’ meeting. After the allocation, the Board of Directors shall draft an earnings distribution proposal regarding the remainder of the earnings as well as accumulated undistributed earnings for the shareholders’ meeting to approve the distribution of dividends and bonuses.

Please refer to the Company’s annual report for the remuneration for the Directors, President, and Vice Presidents, the names of managers who received the employees’ remuneration, and the distribution status. All severance pay and pension were paid in accordance with laws and the conditions were the same as those of other employees.