Epson 2016 Annual Report Download - page 45

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44
Directors and executive officers shall allocate a percentage of their basic remuneration, the percentage
to be separately decided by the Board of Directors, to the acquisition of Company shares through the
officer stock ownership plan. Participation in the officer stock ownership plan is optional for outside
directors.
- The compensation of corporate auditors is decided by board of corporate auditors and shall not exceed
the basic remuneration decided by resolution of general shareholders’ meeting. Participation in the
officer stock ownership plan is optional for corporate auditors, who are not eligible for bonuses.
Procedure for determining compensation
- Compensation is determined by an appropriate body, such as the general shareholders’ meeting and the
Board of Directors, after a fair, transparent, and rigorous review by the Director Compensation
Committee, which is composed mainly of outside directors and which issues an opinion, to ensure
transparency and objectivity.
Compensation paid
Category Total compensation
(millions of yen)
Compensation breakdown
(millions of yen)
Number of
individuals
Basic
remuneration
Bonus
Directors
(including total for outside
directors)
454
(28)
359
(28)
94
(-)
10
(2)
Corporate auditors
(including total for outside
corporate auditors)
96
(39)
96
(39)
-
(-)
5
(3)
Total 550 455 94 15
Notes
1. The number of individuals above includes one corporate auditor who retired on January 31, 2016.
2. Epson introduced a stock performance (stock-based) component to the compensation system to link
compensation more closely to share price, so Epson stock accounts for a portion of the basic remuneration.
3. A resolution passed at the general shareholders’ meeting of June 26, 2001, established the maximum basic
remuneration at ¥70 million per month for directors and at ¥12 million per month for corporate auditors.
4. The compensation paid includes ¥94 million in director bonuses (bonuses to be paid to the eight directors,
excluding outside directors), which were approved at the June 28, 2016 annual general shareholders’
meeting. There is no bonus system for corporate auditors.
5. An outside corporate auditor who retired at the closing of the annual general shareholders’ meeting held on
June 28, 2016 will be paid a retirement benefit of ¥15 million pursuant to a resolution of the annual general
shareholders’ meeting held on June 23, 2006 on the payment of officer retirement benefits.
6. Stock options are not granted.
(ii) Compensation for performance in and after the 2016 fiscal year
The introduction of a more transparent and fair performance-linked stock compensation plan was approved
at the annual general shareholders’ meeting on June 28, 2016. The plan for officers is designed to
strengthen a sense of shared interest with shareholders and to show a commitment to sustaining growth and
increasing corporate value over the long term.
Basic policy
The basic policies regarding the officer compensation system are as follows.
Compensation for officers who have executive duties
(a) Compensation shall provide incentive to improve business performance in order to increase corporate
value in both the near, medium, and long terms.
(b) Compensation shall be sufficient to attract qualified persons both from within the Company and from
outside.
(c) Compensation shall be commensurate with period performance so that they can demonstrate their
management capabilities to the fullest during their tenure.
Compensation for officers who do not have executive duties
(a) The composition of compensation shall guarantee independence so that these officers can suitably
exert their general management supervisory function, etc.