Omron 2015 Annual Report Download - page 36

Compensation for directors shall consist of a base salary, yearly performance-linked bonuses,
and medium-to-long-term performance-linked compensation.
●The Company shall provide base salaries that enable it to recruit, hire, and retain talented
personnel capable of implementing the Company’s mission and the Omron Principles.
● The Company shall provide yearly performance-linked bonuses as performance incentives
with emphasis on yearly results.
－－ The amount of yearly performance-linked bonuses shall be based on a standard
amount for each position, and shall be determined according to the degree of
achievement and growth rate for evaluation indicators for bonuses, including income
before income taxes, return on invested capital (ROIC), net income attributable to
shareholders, and cash dividends per share.
●To ensure thorough implementation of the Company’s long-term management plan, the
Company shall provide the following two types of compensation linked to medium-to-long-
term performance as incentives for meeting medium-term management targets.
－－ The Company shall pay medium-term performance-linked bonuses depending on the
achievement of medium-term management targets.
－－The Company shall grant stock compensation*1 as compensation linked to maximization of
corporate value (stock value).
Compensation Policy for Directors
● Compensation for directors and executive officers shall be based on the implementation of the
Company’s mission and corporate principles (the Omron Principles).
● The Company shall pay compensation that enables it to recruit, hire, and retain talented
personnel as officers.
● The compensation structure shall contribute to long-term maximization of corporate value by
providing motivation for directors and executive officers.
● The compensation structure shall maintain a high level of transparency, fairness, and
rationality, to ensure accountability to shareholders and other stakeholders.
・ To ensure transparency, fairness, and rationality in the compensation for individuals, each
director/executive officer’s compensation shall be set by consultation with the Compensation
Advisory Committee.
● The purpose of compensation shall be made clear, and a compensation plan shall be created according to
the roles and responsibilities of each director/executive officer.
Basic Principles of Compensation for Directors and Executive Officers Revised in June 2014
■ Fiscal 2014 Director and Audit & Supervisory Board Member Remuneration
To promote greater objectivity and transparency, the Compensation Advisory Committee, chaired by an
outside director, offers advice, conducts deliberations, and makes recommendations regarding director
compensation. This recommendation is presented before the annual general shareholders’ meeting,
which votes on the total scope of compensation for members of the Board of Directors and members of
the Audit & Supervisory Board. Within this scope, the Board of Directors determines compensation for
each director according to Board resolution, as well as compensation for individual Audit & Supervisory
Board members pursuant to discussion and negotiation.
*Basic compensation for directors (excluding outside directors) includes the amount paid as stock compensation.
Classification No. of Individuals Basic
Compensation
Annual Performance
Bonuses
Medium-Term
Performance Bonuses Total Compensation
Directors
(Outside Directors)
8
（2）
358
（24）
236
（－）
－
（－）
594
（24）
Audit & Supervisory Board
Members
(Outside Members)
4
（2）
82
（18）
－
（－）
－
（－）
82
（18）
Total (Outside Directors /
Members)
12
（4）
440
（42）
236
（－）
－
（－）
676
（42）
(Millions of yen)
*1 The guidelines for stock compensation shall consist of a fixed amount of compensation given each month to directors, who will use it to make monthly purchases of the
Company’s stock (through the officers’ stockholding association) and hold this stock during their term of office.
*2 The performance-linked stock acquisition rights are issued with charge at a price equivalent to the fair value of the stock acquisition rights, thus the amount to be paid in
exchange for stock acquisition rights is not necessarily favorable for individuals who are allotted the stock acquisition rights. Because of this, the stock acquisition rights do not
fall under the category of compensation for directors, and thus they shall be issued via a resolution by the Company’s Board of Directors.
●Compensation for Audit & Supervisory Board members shall consist only of a base salary that
reflects their roles. It shall enable to recruit, hire, and retain talented personnel.
●No retirement bonuses shall be paid.
●The level of compensation shall be determined by taking into account the levels of other
companies, based on a survey conducted by an independent compensation consultant.
Compensation Policy for Audit & Supervisory Board Members
The Company has introduced medium-term
performance-linked bonuses from fiscal 2014 and
issued performance-linked stock acquisition rights
in an effort to give directors incentive to achieve
the medium-term management targets and to
strengthen the governance of compensation.
In response to the introduction of the new
structure, the governance system regarding
compensation of directors, etc., consists of: (1) base
salary, (2) yearly performance-linked bonuses, and
Financial Incentives for Directors and Audit & Supervisory Board Members
(3) medium term performance-linked bonuses,
stock compensation, and performance-linked stock
acquisition rights. By introducing the new structure,
the Company aims for encouraging directors to
continually enhance corporate value by positively
achieving short-, medium-, and long-term
management targets.
Fundamental principles and policy for the
compensation for directors and officers are as
follows:
●Separate from the compensation stated above, the Company shall issue performance-linked
stock acquisition rights*2.
－－ Performance-linked stock acquisition rights shall be issued under the condition of
the achievement of medium-term management targets by directors and a rise of the
Company’s stock price. The objectives are to create medium-to-long-term shareholder
value and encourage directors to own shares of the Company.
●Compensation for outside directors shall consist of a base salary only, reflecting their roles and
the need for maintaining independence.
●No retirement bonuses shall be paid.
●The level of compensation shall be determined by taking into account the levels of other
companies, based on a survey conducted by an independent compensation consultant.
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Integrated Report 2015 69
68 OMRON Corporation