Fujitsu 2014 Annual Report Download - page 92

Disclosed Policy on Calculation and Determination of Compensation Amounts
Executive Compensation Policy
To secure exceptional human resources required to manage the Fujitsu Group as a global ICT company and further strengthen the link between
its financial performance and shareholder value, while at the same time improving its transparency, Fujitsu established its Executive Compensa-
tion Policy as follows.
Executive compensation is comprised of the following: “Basic Compensation,” specifically a fixed monthly salary in accordance with position
and responsibilities; “Stock-Based Compensation,” which is a long-term incentive that emphasizes a connection to shareholder value; and
“Bonuses” that are compensation linked to short-term business performance.
Basic Compensation
• Basic compensation is paid to all directors and Audit & Supervisory Board members, in accordance with their position and responsibilities, as
compensation for work responsibilities with regard to management oversight and the carrying out of executive responsibilities.
Stock-Based Compensation
• Stock-based compensation, intended for directors responsible for carrying out executive duties, is a long-term performance incentive, with the
amount to be paid determined based on a qualitative evaluation of medium- to long-term initiatives.
• Stock-based compensation is to be paid for the purchase of the Company’s own shares. These purchases are to be made through the Director
Stock Ownership Plan. Shares purchased for this purpose are to be held by each director for the term of his or her service.
Bonuses
• Bonuses are short-term performance incentives to be paid to directors who carry out executive responsibilities. The amount of a bonus is to
reflect business performance in the respective fiscal year.
• As a specific method to calculate a bonus, Fujitsu will adopt a “Profit Sharing Model” which uses consolidated operating income and consolidated
net income as an index. However, bonuses will not be paid in the event of negative net income recorded under non-consolidated accounting.
In accordance with a resolution of the Annual Shareholders’ Meeting, the total amount of basic compensation, stock-based compensation
and bonuses shall not exceed ¥600 million per year for directors or ¥150 million per year for Audit & Supervisory Board members.
[Support Structure for External Directors and External Audit & Supervisory Board Members]
Certain staff members of the Secretary Office are responsible for providing support to external directors and external Audit & Supervisory Board
members. In addition, the Legal, Compliance, IP Unit (Secretariat of Board of Directors’ meeting) and the Auditing Support Division (Secretariat of
Audit & Supervisory Board meetings) are also responsible for providing support to external directors and external Audit & Supervisory Board
members. This responsibility involves complying with requests from external directors and external Audit & Supervisory Board members to pro-
vide and explain information about Fujitsu or the entire Fujitsu Group that is required for management oversight or audits. Depending on the
information, relevant business unit managers are made available to provide additional explanations. We also provide a dedicated webpage for
all board members (directors and Audit & Supervisory Board members) to use to access and discuss material relevant to Board of Directors’
meetings, such as agenda items, before meetings are held in order to allow board members to gain a proper understanding of the material.
The above measures are intended to provide indirect support to help external directors and external Audit & Supervisory Board members
provide effective management oversight and auditing of the execution of duties throughout the entire Fujitsu Group by facilitating mutual com-
munication during internal audits, statutory audits, and accounting audits.
2. Issues Relating to Functions for Business Execution, Auditing, Oversight, Nominating, and Compensation
Decisions (Overview of Current Corporate Governance Structure)
(1) Overview of Corporate Governance Structure
BOARD OF DIRECTORS
The Company has a Board of Directors to serve as a body for making important decisions and overseeing management. The Board of Directors is
responsible for supervising the President and Representative Director and the executive directors, which constitute business execution functions.
Moreover, the supervisory function of the Board of Directors has been strengthened by actively appointing external directors. Furthermore, in
order to better define the management responsibility of the directors, their terms were reduced from two years to one year in accordance with a
resolu tion at the June 23, 2006 Annual Shareholders’ Meeting.
The Board of Directors comprises 11 members in total: 5 executive directors and 6 non-executive directors (including 4 external directors).
AUDIT & SUPERVISORY BOARD
The Company has an Audit & Supervisory Board that performs the auditing function. The auditing function is carried out by Audit & Supervisory
Board members, who review the Board of Directors as well as business execution functions and attend important meetings, including meetings
of the Board of Directors.
The Audit & Supervisory Board has five members, comprising two internal Audit & Supervisory Board members and three external Audit &
Supervisory Board members.
Among the Audit & Supervisory Board members, standing Audit & Supervisory Board member Mr. Kazuhiko Kato has extensive knowledge of finance
and accounting issues due to his many years of experience in the Company, including service as the CFO. In addition, Audit & Supervisory Board
member Mr. Hiroshi Mitani has extensive knowledge of finance and accounting issues due to his service as a public prosecutor and as a member of the
Fair Trade Commission and his experience handling many economic matters. Furthermore, Audit & Supervisory Board member Mr. Koji Hatsukawa has
090 FUJITSU LIMITED ANNUAL REPORT 2014
CORPORATE GOVERNANCE