Hitachi 2012 Annual Report Download - page 41

Hitachi, Ltd. Annual Report 2012 39
Financial Section/
Corporate Data
Management Structure
Research and Development/
Intellectual Property
Financial HighlightsTo Our Shareholders Segment Information
Financial Services
Agency
Board of Directors
Audit Committee
*CFO: Chief Financial Offi cer
Internal Control
Report
Monitoring Report
Certifi cation, Management
Assessment Report
Report
Report
Report
Monitoring
Audit
Internal Control Committee
Committee Coordination Offi ce
Hitachi Group HQs (Hitachi Group
HQs and In-House Companies of
Hitachi Ltd.)
Monitoring Report
Internal
Auditing Offi ce
Hitachi, Ltd. President and CFO*
Hitachi Group Internal Control Assessment Framework
Director and Executive Offi cer Compensation
The compensation is commensurate with the ability required of,
and the responsibilities to be borne by directors and executive
offi cers, taking into consideration compensation packages at
other companies. The compensation for directors consists of a
monthly salary and a year-end allowance. The monthly salary is
decided by making adjustments to basic salary that refl ect full-
time or part-time status, committee membership and position,
travel from residence, etc. The year-end allowance is a pre-
determined amount equivalent to about 20% of the director’s
annual income based on the monthly salary, although this
amount may be reduced depending on the Company’s perfor-
mance. Directors concurrently serving as executive offi cers are
not paid compensation as directors.
The compensation for executive offi cers consists of a month-
ly salary and a performance-linked bonus. The monthly salary is
decided by adjusting a basic amount set in accordance with
the relevant position to refl ect the results of an assessment. The
performance-linked bonus is set within a range equivalent to
about 30% of the executive offi cer’s annual income, adjusted
based on Company and individual performance.
The compensation structure for directors and executive
offi cers was re-examined starting with the compensation for
the fi scal year ended March 31, 2009 and the retirement
allowance was abolished.
Compensation for directors and executive offi cers for the
year ended March 31, 2012 is as follows:
Risk Management and Internal Audits
Regarding risk management, each responsible division
implements countermeasures, such as the formulation of
rules and guidelines. Furthermore, internal audits are con-
ducted to monitor and assess the status of business
operations for improvements, including effi ciency in the exe-
cution of day-to-day operations and legal compliance.
Moreover, to ensure strict legal compliance, Hitachi has vari-
ous committees and whistle-blower systems.
Internal Control over Financial Reporting
Hitachi, Ltd. and listed Group companies establish, maintain
and evaluate internal control over fi nancial reporting, and
then report the results on a consolidated basis.
The Group is committed to complying with all laws and
regulations. Further, Hitachi recognizes that it is an important
social responsibility to establish and maintain the systems
that ensure appropriate financial reporting. Accordingly,
Hitachi will continue to enhance the transparency and credi-
bility of its business operations.
Compensation for Directors and Executive Offi cers
Category
Total amount of
compensation, etc.
(Millions of yen)
Total amount of each type (Millions of yen)
Number of persons
Monthly salary Year-end allowance and
performance-linked component
Directors
(Excluding outside directors) 232 203 28 7
Outside directors 85 78 6 6
Executive offi cers 1,740 1,174 566 29
Total 2,058 1,456 601 42
Notes: 1. The number of directors indicated excludes the two directors who concurrently serve as executive offi cers.
2. The amount of compensation to directors includes the monthly salary of the two directors, who retired due to expiration of their term of offi ce at the close
of the 142nd Ordinary General Meeting of Shareholders held on June 24, 2011, and one director, who retired as of September 30, 2011, for their term of
offi ce of the fi scal year ended March 31, 2012.
Directors or executive offi cers whose compensation from the Company and its subsidiaries is not less than ¥100 million and the amount of their compensation are as follows:
Name Company Category
Total amount of
compensation, etc.
(Millions of yen)
Total amount of each type (Millions of yen)
Monthly salary Year-end allowance and
performance-linked component
Hiroaki Nakanishi Hitachi, Ltd. Executive Offi cer* 173 122 51
* Although concurrently serving as director, Mr. Hiroaki Nakanishi does not receive compensation as director.
Hitachi Group
Subsidiaries
Independent
Auditors